Finance and Economics Deeply | One Hundred Times Leverage!

Crazy "currency circle" brings "absolute wealth" or "explosive position"?

　　Under the sharp volatility of virtual currency prices, the "overnight gains" that many people yearn for has become "overnight bursts of money", with no return.

　　Liu Peng, a veteran investor in the "coin circle", did not expect that all the more than 100,000 yuan he had earned since the beginning of the year would be lost in a single dinner.

"I pegged a 5 times contract near $39,000. I thought it was absolutely safe, but I didn't expect it to be liquidated. No one expected Bitcoin to fall so much!"

　　On May 19, the price of Bitcoin plummeted, falling rapidly from a single high of about $43,000, and once fell to around $29,000, with a maximum drop of more than 30%.

According to third-party platform data, on the 19th, liquidation funds exceeded 40 billion yuan, involving about 700,000 people.

　　Behind the clearing of the books of many investors overnight is the trading of futures contracts in the "currency circle".

In recent years, in addition to spot trading, futures contract trading has gradually become an important derivative of virtual currency trading.

This type of contract has the characteristics of two-way trading and high leverage.

On the surface, this type of contract can hedge risk, but more investors see it as a tool to "get rich overnight."

Because after leverage is added, as the "currency value" rises and falls, the income will change exponentially.

　　Reporters browsed through a number of trading platforms and found that contract trading is mostly regarded as a sector as important as spot trading. Trading areas have been opened up and promoted by launching preferential activities. For example, participating in contract trading in a certain currency can participate in sharing.

　　Investors can choose "short" or "long" in contract transactions, by depositing a margin, signing a contract with the trading platform to borrow money and leverage money to speculate.

What is shocking is that some platforms can reach a maximum leverage of 125 times.

　　However, many investors who have increased leverage only see the trend of choosing the right, and the book funds have skyrocketed, but they seldom think of the huge losses they might face after choosing the wrong one.

If the short-term position is insufficient and it is difficult to add margins such as Bitcoin, many investors can only watch the book liquidation that they used to be proud of.

　　In January this year, investor Mr. Zhou entered the market with 500,000 yuan in capital, dreaming of embracing the "bull market" and making a fortune.

At first, following the tide of market frenzy, Mr. Zhou's book funds once rushed to 3 million yuan.

However, with the arrival of the market crash on May 19, his book funds have shrunk significantly.

Not reconciled, he increased the leverage ten times and wanted to buy the bottom, but unexpectedly the depth of the market hit the bottom, and the 3 million yuan "evaporated" in more than an hour.

　　"Looking back now, the whole process is like a dream." Mr. Zhou sighed.

　　The price of virtual currency fluctuates sharply, which is more risky than the traditional capital market, and contract transactions further amplify the risk.

　　"In a large'casino' where virtual currency rises and falls by 50% in a single day are normal, high leverage has extremely high risks. Because even if you win 99 times, as long as you lose once, you may go bankrupt." Liu Peng said .

　　The trading risks of virtual currencies go far beyond the violent price fluctuations. Behind the trading hype, they are often accompanied by "bookmakers" manipulating market prices.

　　"Investors' counterparties are not only other investors, but sometimes platforms also end up in person. Some platforms induce investors to participate in high-leverage investments on the one hand, and on the other hand they secretly manipulate prices in the market." A source in the "coin circle" revealed.

　　According to industry insiders, virtual currency transactions have no physical support and prices are easily manipulated.

In particular, many "air coins" issuance technology is vague, the upper limit of issuance is uncertain, there are a large number of holders, and it is very easy for "bookmakers" to manipulate prices.

　　Mr. Zhang, who had “grouped” with many investors to defend their rights, revealed that many of them were liquidated for opening contracts and leveraged transactions on a virtual currency trading platform, and each person generally lost several hundred thousand yuan.

"We suspect that the trading platform is tricky in trading, and the price has been manipulated artificially." Mr. Zhang said.

　　Mr. Zhang has not heard from the platform for rights protection for several months, but there is no other way.

Judging from the current judicial practice in my country, virtual currency transaction contracts are not protected by law, and the consequences and losses caused are borne by the relevant parties themselves.

　　Under high-leverage liquidation, many investors are left empty-handed, but the virtual currency trading platform has made steady profits in it.

　　"Regardless of whether the investor loses or earns, the trading platform will charge. Although most of the platforms have been cleaned up in China, some platforms have moved overseas and are basically targeted at domestic investors. Some website pages are in Chinese, and the customer service It is also in Chinese, and the purpose of evading supervision is clear at a glance." said Dong Ximiao, chief researcher of China Merchants Union Finance.

　　The ruthlessness of the market has not made investors awake, and there are still many people who "follow them".

　　According to third-party platform data, taking 10:00 on May 28 as the node, in the past 24 hours, the amount of liquidation exceeded 2.4 billion yuan, and the number of liquidation exceeded 75,000. The largest single liquidation occurred in the ether of a trading platform. In the transaction, the amount involved was close to 15 million yuan.

　　Dong Ximiao said that it is necessary to further strengthen investor education, improve the ability of ordinary investors to identify and prevent risks of virtual currency, and remind the public to stay away from any form of virtual currency trading hype. At the same time, it is necessary to strengthen international supervision cooperation and explore the difficulties of cross-border supervision of virtual currencies. (Reporters Li Yanxia, ​​Wu Yu, Mao Zhenhua)