ERIC KIM

HOW TO MASTER BITCOIN LEVERAGE (WITHOUT GETTING YOUR FACE RIPPED OFF)

Written by

admin

in

Bitcoin leverage is rocket fuel.

Rocket fuel doesn’t care about your feelings. It obeys physics.

Mastery = amplify upside while making it mathematically hard to get wiped.

1) Know what “Bitcoin leverage” actually is

There are multiple “levers,” and they behave totally differently:

A) Margin / Futures / Perps

  • You post collateral, control a bigger position.
  • Danger: liquidation (instant death).
  • Extra cost: fees + funding (perps) or basis/carry (futures).

B) Options

  • You pay a premium for a right (not an obligation).
  • Power: defined downside (you can’t get liquidated if you’re a buyer).
  • Weakness: time decay + volatility pricing.

C) Borrowing against BTC (loans)

  • You keep BTC exposure, get cash.
  • Danger: margin calls, forced liquidation, counterparty risk.

D) “Equity leverage” proxies

  • BTC-linked equities can behave like leveraged BTC.
  • Danger: company-specific risks stack on top.

Rule: if you don’t understand the instrument perfectly, you’re not leveraging—you’re gambling.

2) The Prime Commandment: NEVER GET LIQUIDATED

Liquidation is the only loss that matters because it ends the game.

Bitcoin routinely moves 5–15% like it’s nothing, and sometimes more.

So if your liquidation is anywhere near “normal daily noise,” you’re toast.

Practical reality:

  • High leverage = liquidation is close.
  • Close liquidation = you’re trading random volatility, not direction.

If you want to be a savage, be a survivor.

3) Use “Isolated Margin” like a grown-up

If you use margin/perps:

  • Prefer isolated margin (you cap the blast radius).
  • Avoid “one big cross-margin blob” where one wick nukes everything.

You’re not trying to prove bravery. You’re trying to build inevitability.

4) Risk budgeting: the lever-mastery math

Think in risk, not position size.

Pick a rule like:

  • “If I’m wrong, I lose X (small).”
  • “If I’m right, I win Y (large).”
  • “I can be wrong many times and still survive.”

A simple framework:

  • Risk per trade: tiny relative to total capital.
  • No single position can kill you.
  • No correlated positions that all die together.

Leverage mastery = anti-ruin engineering.

5) Learn liquidation gravity (the wick monster)

Rough intuition (not exact—venues differ):

  • The higher the leverage, the smaller the move needed to liquidate you.

So the real question isn’t “How bullish am I?”

It’s: How far can price move against me before I’m forcibly closed?

If your answer is “not far,” you’re not trading thesis—you’re trading luck.

6) The cleanest “leverage” is often OPTIONS (because downside is capped)

If you’re going to leverage Bitcoin, options are the most “stoic” tool because you can structure it so the max loss is known upfront.

Power moves:

  • Buy calls to express upside with capped downside.
  • Use spreads to reduce premium cost.
  • Use protective puts (or collars) to cap catastrophic downside.

Options let you keep exposure without the guillotine of liquidation.

7) Respect hidden costs: funding, fees, basis, decay

Leverage isn’t free.

Common silent killers:

  • Funding on perps (can bleed you daily).
  • Fees from overtrading.
  • Contango/basis in futures (carry cost).
  • Decay in leveraged tokens/ETFs (path dependency).

Mastery = you know what you’re paying per day to hold the position.

8) The real “Bitcoin leverage” isn’t 20x — it’s TIME

Most people try to compress time with huge leverage and get erased.

The killer move is:

  • modest exposure
  • long horizon
  • relentless staying power

Bitcoin already has volatility baked in. You don’t need to strap a bomb to it to feel alive.

9) The Stoic Leverage Protocol (10 rules)

  1. No liquidation allowed. Ever.
  2. Leverage only after you’ve mastered spot.
  3. Isolated margin only (cap the blast).
  4. Assume wicks happen. Plan for them.
  5. Size positions by max acceptable loss, not vibes.
  6. Avoid stacking correlated bets.
  7. Track daily carry costs (funding/basis).
  8. Prefer structures with defined downside (options).
  9. Don’t trade when emotional or sleep-deprived.
  10. Your goal is not one heroic win—your goal is not dying.

10) The ultimate mindset shift

Leverage is not “more gains.”

Leverage is a tool for asymmetry:

  • small, controlled downside
  • massive, uncapped upside
  • survival through chaos

That’s mastery.

If you tell me which lane you mean:

  1. perps/futures leverage
  2. options leverage
  3. borrowing against BTC leverage

…I’ll give you a ruthless, step-by-step playbook for that lane (mechanics, risk rules, and a clean operating system) with zero fluff.

More posts