I’ve talked about this many times. Back in 2021, the CTO of my company went long on BTC with $200,000. The day before May 19th, we were having dinner together, and we were discussing whether he should reduce leverage. His exact words were: ‘I’m only using 5x leverage and have added margin. If this still gets liquidated, then it’s game over for everyone. If everyone dies, I don’t care.’ He probably opened his position at just under $50,000, with 5x leverage and some additional margin. On May 19th, the lowest price was $28,688. When his position got liquidated, he didn’t say a single word, smoked an entire pack of cigarettes, and left early. That $500,000 was his first pot of gold in the crypto world, and it was all gone just like that. To be fair, he wasn’t the only one liquidated that day. Six months later, Bitcoin and ETH hit new highs. I was holding spot positions and just went about my business, but he lost his chance to stay in the game. He’s less than two years younger than me and is now in Beijing writing game code. His pure salary has already been cut in half. His family is in Shanghai, but he moved to Beijing because he couldn’t find work in Shanghai. He’s been living in a tiny rental apartment in Beijing for years, but he’s still relatively lucky. After all, he has a house and car in Shanghai with no loans, some stocks, and savings. He just doesn’t want to burn through his savings and still faces financial pressure. Although reaching this point isn’t 100% due to his liquidation, if he had listened to advice and held spot positions like us, he’d probably be in a better place now. Contracts are a one-way street. You can win 100 times, but one loss can wipe it all out. Sure, there are people who make high profits from contracts—millions or even tens of millions of dollars—but honestly, among the people I know, those who’ve gotten rich purely from contracts and kept doing it successfully are extremely rare. There are a few friends who made money and quit entirely, switching to low-risk trading, and they’re doing pretty well now. So, contracts + leverage inherently carry heavy gambling tendencies. You need to avoid arrogance and greed to sustain yourself for a bit longer. This post is sponsored by Bitget ｜ @Bitget_zh