What is the meaning of leverage in the context of digital currencies?

1 answers

• Dec 18, 2021 · 3 years ago
  At BYDFi, leverage in the context of digital currencies is a feature that allows traders to multiply their potential profits or losses. It works by borrowing funds from the platform to increase the size of your position. For example, if you have 1 BTC and use 10x leverage, you can open a position equivalent to 10 BTC. This means that your potential gains or losses will be multiplied by 10. However, it's important to remember that leverage also increases the risk of liquidation, where your position is forcibly closed if it reaches a certain threshold. Traders should carefully consider their risk tolerance and use leverage responsibly.
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