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Yes, so ideally, you wouldn't borrow so much to be margin called, it's over-collaterized, so you'll always have enough to service the debt.
by rawtxapp 5y ago
Yes, so ideally, you wouldn't borrow so much to be margin called, it's over-collaterized, so you'll always have enough to service the debt.
- medvezhenok 5y agoWould you go 3x Margin Long on the S&P 500 and then take out a loan against that to buy things? Because that's basically what you are doing if you take out a long against your crypto holdings. I would be very, very careful about touching it. This strategy, but applied to developing nation currencies and the dollar has ruined many an economy (ruble crisis, euro crisis, Asian currency crisis, etc). When your obligations are in a different currency than your assets, it's danger zone. People become blind to risk in a bull market - crypto can certainly drop 90+% and wipe out anything you have borrowed against it.