Upon realizing I thrown away a 90X gain with LEVERAGED TOKENS ---> a brief story of winnings and losses

By Ariman | Crypto_Life_Style | 7 Jan 2021

Market movements love to make us all looking stupid Ahahahah 

Or at least, this is true for me, more than once. But most of the crypto traders MUST have missed some great occasions during their activity. However, I'm not speaking in terms of the very well known words like "If only I had bought Bitcoin in 2012..." ecc ecc, but I'm talking about something way more recent and subtle. We all had stories like this, but I feel that is worth telling you that one.

Now I realize to what extent I was blind and stupid. I had an enormous chance to win, I've almost made the right thing for once. I had invested a too big amount of fiat, for my pockets, into that project, ingnoring the possible huges profits as well as all of the risks. I will use this small post to introduce also what are Leveraged Tokens (LT), and which risks they bring with them. 

The product in question is the Leveraged Token ETHBULL. Those are ERC20 tokens that seeks a DAILY return which is 3 times the one of the underlying asset (Ethereum, in this case). If ETH moves +5% in a day, this LT will move +15% during the same time period. The seek-price-mechanism is garanteed by the fact that users can not only trade them, but also CREATE and REDEEM them, for an USD amount  corresponding to the amount of ETH perpetual futures the leveraged tokens represent at a time.

Basically, it's like if you go 3x leverage with a perpetual future contract. But you can't be liquidated! That's fine. This is the reason why I've started using them: I was in the need of a risky product, but didn't have enough confidence to jump into futures trading. Apart the no-liquidation point, there is another aspect in which investing in L.T. is different from opening a 3X position. The point is that losses and profits are magnified. That is, if ETH price surges 10% for 3 continuos days, the leveraged token will perform 30% the first day, than maybe 31% and finally 33%. This is because losses and profits are authomatically re-invested in. So that if a positive uptrend is hold for several days, you'll end up with a kind of exponential growth: a detailed analysis is rather complex.

Here comes my personal experience. A little bit before the official beginning of the Covid-19 pandemic in Europe, around 10 March 2020, I was nearly 30% up over my initial investement, started in mid 2019. But I was studying for exams, and I didn't noticed the incredible market fall that happened on 12 March 2020. So, few days later, when I checked my wallets here and there, I got depressed. My wallet were now at 50% the initial investement! I felt the need to put everything in something risky, to try recover the loss. This could be a very stupid move, don't do it. But for me, it worked.

In those days I've discovered about Leveraged Tokens on Binance. Maybe some of you remember when in February-March 2020, Binance listed those tokens, but they actually came from FTX exchange. So they have been quickly removed, and some times later changed for a Binance versions of them, with names like BTCUP , BTCDOWN, ETHUP, ETHDOWN ecc...ecc...

I've bought some ETHBULL some day before the de-listing on Binance, then transferred to FTX exchange (the original issuer of those tokens, and my preferite one). It was at the end of March. ETHBULL was trading at around 60 to 100 $. I've sold it few weeks later, for around 200$ each, and my wallet was a bit up again.

Now, if you are a crypto-nerd, you may remember that the Ethereum price went down to almost 90$ , during those infamous days of cryptos and stocks market fall. If I was a bit smarter, I should have even buy more and, most importantly, I should have waited for at least ETH to recover half of it's value!!! It was obvious it will do it, at the time. But I was not smart enough.

Look at this screenshot, which comes from my FTX account:



I've put the bar at the 30 March 2020. In the upper part, you can see Open , High, Low and Close prices of that day. If I rebember, I bought them for 67$ few days before. Look at the price now... 6000$ !!! It's almost a 100x profit. I would have bought an house now :-)

If I had holded them for just a couple of month, till August-September, I would have bought a car ahahah

Unfortunately, once solded, I've started trading normaly again for a while on Binance and FTX, then I moved to mainly futures contracts , till now, mostly on FTX, which I suggest you to give a try. If you want to register there, use my referral link here https://ftx.com/#a=2707323 ,for a 5% fees kickback, forever, and fees are really low.


Consider the case I had bought ETHBULL, say, just some weeks before, before the pandemic, I would have lost my skin now. The price of the LT fallen from the around 2000$ level to 50$ ahahah. Finally, I was lucky, because this small adventure rebalanced my wallets to again a small % up, with respect to the initial investment amount.

As you can see, the price of the leveraged tokens performed way more than just 3 times Ethereum, in the same period. The latter moved from, let's say 100$, to 1200$ , with a 12x increase; meanwhile, the leveraged token performed multiplied it's value not by 12x3=36 times, but almost 100 times!

Thank you very much for reading my post!
I hope this post warned you about possibile profits and RISKS while owning and trading leveraged tokens.

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I'm Master degree in Theoretical Physics while being totally and irrationally in love with the crypto world. From Italy


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