Quote from: nullius on Today at 02:58:57 AM

Public Service Announcement:

Where that road leads: Liquidation.

For example, from someone who started out exactly with the oh-so-clever idea that you state in OP—with lower leverage than you think to use, “in case the price drops”:

Quote from: death_wish on May 10, 2022, 07:29:53 AM

Now, I want to kill myself... or at least, take up alcoholism as a hobby.

(Someone, please quote me.)

https://i.imgur.com/yDYL8Uy.png

Later, after worse wreckage:

Quote from: death_wish on June 15, 2022, 07:23:57 AM

Finding that loose change helped so much: $48.82 is now a lot of money to me.

My finances have become dollhouse-sized.

https://live.staticflickr.com/159/370515222_dfed969473.jpg
Image: A dollhouse handmade by someone’s grandfather (Dave Parker, 2007). Surely a mansion, compared to what my scaled-down finances can afford.

A few months ago, as I nurtured my growing BTC long-term savings and a zoo of alts, I was throwing around $10k and $40k chunks of stablecoins.

[...]

I am now the proud owner of 0.0495 BTC plus a handful of sats, with a liquidation price a little bit under $19.2k. If Bitcoin somehow breaks below $20k, the whole account is so small that I can hold a dollhouse yard sale of miniaturized alt-dust to raise $50; another $50 infusion would push my liquidation price down by >$1,100. Eventually, I will get around to freeing my itty-bitty dollhouse bitcoins from the encumbering debt of around $853. Meanwhile, I can hold a dollhouse tea party.

$48.82 is now a lot of money to me. Finding that loose change helped so much.

This person was apparently borrowing against their Bitcoin in order to purchase more Bitcoin. This sounds like a terrible idea, because if the price of Bitcoin drops, then you’ve lost value in the equity of your original Bitcoin, and you’re paying a higher price for the new Bitcoin because you have to pay off the loan.

Quote from: death_wish on May 10, 2022, 07:49:25 PM

A few months ago, I bought on margin between $35k and $43k. Some things went wrong, with complications from other transactions; leverage wound up higher than planned, but still at what seemed a "safe" level. Then, I held through $48k because I do not want to sell any BTC, ever.

I was one of the idiots trying to increase LTH BTC by leveraging BTC to buy more BTC in the dip, then slowly repaying the margin loan from other income. (Plus doing some of that "borrow against your BTC!" stuff for other purposes; this is the succinct version.)

That's similar to what Saylor does. Why shouldn't I do it? Oh, yes, because Saylor has access to lending terms that are not insane.

Exchange margin accounts make loans on the worst possible terms: If the fuzzy-notional price of an oracle (not even the real market order-book price) dips even one microdollar below exactly $x for even one microsecond, then a robot instantly trashes your collateral. Sells down, market-dumps - with liquidation penalty.

This is not something I would recommend doing at all. However, I never want to sell my Bitcoin. I want to leave it to my children, and teach them about money and why they should buy Bitcoin.

You never sell the family gold, and you never sell the family farm. My dad sold a farm in exchange for an acre with a house; and now that farm is worth 30x what he sold it for, and his acre is maybe worth 3x after 20 years. I don’t want to make that same mistake.