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Who is covering that credit risk? Or is your point that no one is, and that if enough levered trades go the wrong way, the whole system is at risk?
by SpelingBeeChamp 5y ago
Who is covering that credit risk?
Or is your point that no one is, and that if enough levered trades go the wrong way, the whole system is at risk?
- impulser_ 5y agoPretty much. Most exchanges will automatically sell your position at market price if you reach a certain percentage of margin. That how you get the massive dips that get bought very quickly. You have tens of thousands of Bitcoin being sold at market price. It causes a domino effect across the whole crypto market because people are using leverage to buy any coin even shitcoins like Doge and Shib.