BTC3L and BTC5L aren’t actually bitcoin, they’re just tokens designed to amplify bitcoin price moves by 3x or 5x. So if BTC goes up, these tokens should do the same but at a greater rate. The 5x perpetual has funding rates that can either add or subtract, while 5x futures don’t have funding rates but they do expire. Anyone have a preference? What risks do you see?
I prefer using 10x-20x use for daily trading on some exchanges, keeps things spicy. Gotta manage that liquidation risk though, so I usually trade smaller amounts when going higher on use.
I'm not a fan of leveraged tokens like BTC3L and BTC5L. They can really mess you up in the long run. Perpetual contracts are much clearer in terms of fees and risks. Those rebalancing fees on tokens can really add up. Why deal with that when perpetuals have more straightforward funding fees?
Wait, so you take 10-20x use but then reduce your trade size to avoid liquidation? What’s the game plan there? Just curious how you manage that. Also, BTC3L and BTC5L are just use tokens available on the spot market, right? They move respectively with BTC's price but the direction depends on L or S.
Ultimately, it really comes down to personal choice and trading style. Each option has its own risks. If BTC drops, a 3L token might go to zero pretty quickly, but some exchanges can rebalance to help with that. But once it hits zero, it can be hard to bounce back, even if BTC rises afterward. I kinda like 3L/5L for the simplicity though.
Yeah, but a drop can really hit a 3L token hard, and that 5L is even riskier. Long term, I’d steer clear of those. They just mess with your profits too much. Plus, why use tokens that aren’t even priced in the same multiples as BTC? Seems silly.