Wherever there is scenery, go there; if it's beautiful, then record it.

I actually never understood why people open leverage on contracts; it seems so foolish to me. Clearly, there are implicit leverage/zero-cost leverage options available, yet they choose the easiest way to lose.

Adding leverage comes with costs; the explicit cost is the constant erosion of capital fees, while the implicit cost is the increased risk of liquidation.

For example, when you go long, during a bad market, the rate for 1x leverage is 1% per month; when the market comes, the rate might require a 10% capital cost in one month. Adding leverage increases costs, and the risk of liquidation increases exponentially with the leverage multiplier.

If you must leverage, why not use an off-market consumer loan and then buy spot?

For example, if your principal is 200,000, using D to consume collateral D to create 600,000, then buying spot, that’s 4x leverage, with a capital cost of only 3% per year. (Of course, this method is not recommended, as most people still cannot change the outcome of losing money.)

In the market, there are actually many implicit leverage or zero-cost leverage options:

Spot is essentially a model of zero-cost leverage; the cost of adding leverage is actually borne by the gamblers and the fabric of side strategies within the circle. For example:

Holding spot and trading contracts are very different, and the longer the period, the bigger the difference.

Spot can serve as a credit asset for some side strategies; holding it can yield a share of the profits from this game. By buying spot and staking for rent, you can gain about 30-50% more chips in a year.

In the upcoming market, if it rises by 50%, you double your investment; if it falls by 20-30%, you won't lose money; while returns are amplified, the margin for error is also much larger.

Contracts are a betting game based on asset pricing; if you play the game, you have to spend money, and the capital cost is the threshold for playing the game.

If the price remains unchanged, holding a 1x leveraged contract may result in a net value of only 0.8 after a year, which is nearly half the difference compared to a spot strategy; the larger the leverage, the greater the gap, and the longer the time, the bigger the difference.

The former benefits from a time-based strategy, while the latter continually incurs time value losses; mathematically, the odds are quite different.

Selecting assets is also a form of zero-cost leverage:

After a market cycle, different assets perform differently. For example, in this round, SUI and BGB increased tenfold; if you are still watching EOS and LTC, you can only enjoy a 6.70% increase.

If you have the ability to pick strong assets, then essentially you are leveraging 3-5 times without capital costs or liquidation risks, achieving astonishing profits without bearing additional risks, and you won't easily get wrecked.

Long-term spot as a zero-cost leverage requires patience, while selecting assets as a zero-cost leverage requires capability. Most people lack both, and they lack confidence in themselves and are unwilling to put in effort, choosing the most obvious pitfalls, losing dozens of points in a year through extraction, while still fantasizing about making big money, only to end up with nothing left.

Follow Sister Hong to layout in this bull market.

Easily flip the cabin.

#加密市场回调 #币安Alpha上新 #DeFAI热点 #晒交易赢奖励 #BNB纳入不丹GMC加密战略储备

HIVE XRP SUI DOGE PEPE BIO SOL PENGU ACT AI