Some people directly say they don't want to be friends with those who borrow money to trade crypto, because they are too dangerous.
Written by: 1912212.eth, Foresight News
In the crypto world, the days of making big gains from small investments with hundredfold opportunities are long gone. If one missed the wealth-creating opportunities in 2017 and 2021, hoping to turn a small investment into a fortune is like a daydream. Of course, Twitter is full of stories about turning a few thousand dollars into millions through contracts, or becoming famous with a MEME, but these are rare success stories. Most people either didn't make money or lost money, and they remain silent and unnoticed. For some crypto traders, borrowing money to trade has become a "consensus".
Recently, OKX's account freezing wave has brought the topic of borrowing money to trade crypto to the forefront of public opinion. According to reports, some user accounts were frozen due to fund source issues. OKX requires users to provide detailed proof of funds, including income records from the past ten years, and clearly states that they do not support using funds from online loans for cryptocurrency trading. This incident has not only raised questions about OKX's compliance policies but also sparked heated debates within the crypto community about "online loan trading".
Open-Minded Approach: Airdrop Farming, Arbitrage, Buying Mainstream Crypto Spot
Siri Group's chief economist Hong Hao once said, "When your capital is too small, even multiplying it several times won't significantly impact your life." Most crypto traders hoping to get rich probably share this view.
Twitter user 0x Wudao expressed a complex attitude towards online loans, saying, "Last July, I borrowed 200,000 from Borrowing Bao, mainly due to the low interest rate of around 3%. The total interest for a year was just over 10,000. It would be a waste not to use such a low-risk leverage."
He revealed that he ultimately doubled his returns and has since repaid the 200,000 loan.
Trader Crypto Monkey disclosed that after the 2017 94 event, he borrowed 180,000 from Wan Yong Jin, 100,000 from Netbank Loan, 70,000 from Micro Loan, and 20,000 from Zhaolian Good Period Loan, totaling about 600,000 yuan to buy the dips.
"After going All In with borrowed money, that was the most difficult time of my life. The market was constantly fluctuating, with ups and downs of tens of thousands. The most frustrating part was having to repay several thousand each month. Pressure turned into anxiety, and each day felt like a year. I countless times considered the consequences of losing the bet."
Eventually, he waited for the bull market and received a substantial return.
Smart people use borrowed funds to buy the dips during painful bear markets and downturns, waiting for returns in bull market cycles. Or they use borrowed funds for airdrop farming and arbitrage, avoiding high-leverage positions that dream of overnight wealth, which might be a key way to avoid risks.
Crypto player Xiao Su (pseudonym) told Foresight News, "As long as the borrowing cost is low, you can even make some money buying Bitcoin spot. It mainly depends on individual risk appetite. I use borrowed funds to buy mainstream crypto spot and leave it, planning to sell if there's a market in the second half of the year. But I only borrow what I can repay, and even if I lose this money, it's not the end of the world."
Opponents: Essentially Increasing Leverage
While some have an open attitude towards borrowing to trade crypto, many strongly oppose it. Famous KOL Bitcoin even said, "Borrowing to trade crypto is essentially increasing leverage, a game designed for very few. Most people trying to change their fate actually accelerate its backlash. Thinking 'I can win' is self-deception! Truly changing one's fate has never been about 'borrowing to gamble', but about time, patience, and continuous value accumulation."
As the discussion about borrowing to trade crypto intensifies, OKX founder Star explicitly stated he does not recommend or support borrowing to trade crypto, questioning which platform supports or encourages users to borrow for trading.
Trader Paulwei also explained on Twitter why he doesn't recommend players borrow to trade crypto, especially contracts.
He explained that even when money is tight, he absolutely refuses to borrow externally for trading. Because being liquidated to zero means the current method is wrong, the skill level is insufficient, and one is not "qualified" to use the previous fund amount. Immediately using more money to trade will likely repeat the same mistake and fall into a deeper abyss. Daring to start over with small money is the way to mutually verify "method - fund amount" in a spiral growth. In such a highly volatile market, if the method improves, even with small funds, growth will be natural and even faster than expected. Conversely, if the method hasn't improved sufficiently, using external force to increase fund amount will only unnecessarily increase "tuition fees".
Profit from trading is never about crazy leverage. Once burdened with huge debt, it often significantly impacts subsequent life. Some contract-trading users, eager to recover, hope for a final big bet, only to fail again and fall into an abyss.
Paulwei believes, "The key to surviving a low period is making an extremely unnatural decision: dare to slowly explore with lower leverage and less principal."
Summary
Some Web3 practitioners, due to provident fund and social security issues leading to high bank loan thresholds, with limited principal and a mindset of quick money, ultimately chose online loans. However, the market is unpredictable, leverage is a devil, and dancing with risk can easily lead to total loss. Controlling risk and not leaving the table might be the true path to survival in the crypto world.
