📜 Pages of crypto history: leveraged tokens
In the cryptocurrency world, dozens of unusual instruments appeared. Some took root, others faded into oblivion. Today we will recall one bright but controversial product — leveraged tokens (LT). They once promised simple trading with enhanced profitability, but soon faded into history.
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🔎 What was that?
Leveraged tokens were conceived as a simplified version of margin trading.
Want to earn more on the rise of Bitcoin? Just buy a 'growth' token.
Think the price will go down? For that, there were 'inverse' tokens.
Instead of complicated margins and collateral — just one click, like with a regular altcoin.
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⚙️ How did they work
Behind each token was a basket of futures contracts. Algorithms automatically adjusted the leverage to maintain the amplification effect.
But in practice, it turned out that:
during strong movements, tokens indeed showed quick results,
during sideways movement or sharp fluctuations, the washing effect began — the value gradually melted away.
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❌ Why they are no longer available
Although leveraged tokens were actively traded in 2019–2020, they almost disappeared later. The reasons are simple:
1. Complexity of understanding. Newbies expected linear growth 'x3 to Bitcoin', but received losses.
2. Depreciation over time. Long-term trading often led to losses.
3. High risks. Even without liquidations, the product remained an aggressive instrument.
4. Regulatory restrictions. In some countries, they were considered too risky for the mass market.
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📌 Lessons from the past
The history of leveraged tokens showed:
'Simplified' versions of complex instruments always hide pitfalls.
Such tokens are suitable only for short-term trades, but not for long-term investments.
In crypto, there are no miraculous products that provide profit without risk.
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🏁 Conclusion
Leveraged tokens became a symbol of the desire to make the market more accessible, but at the same time — a lesson for investors. Today they have gone into history, making way for more transparent instruments.
They remind you: always study the mechanics of the product before investing.
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#LeveragedTokens Financial markets are always associated with risks. The information in the article is not financial advice, but a personal review of historical events. Everyone makes their own decisions and bears responsibility for them.