At the beginning of 2021, the cryptocurrency market was still immersed in the frenzy of a small bull market. Xu Ning was still a 'conservative' at that time — he engaged in Bitcoin spot trading, relying on the market's overall rise, and his initial investment of 5 million grew to 8 million in three months. Watching the profit numbers in his account jump every day, he felt for the first time that 'wealth accumulation can happen so quickly.'
Change began at a friend's gathering. At the dinner table, a friend who traded contracts patted his shoulder and said, 'The money made in spot is just small change; trading contracts with leverage is the 'fast lane' — with 10 times leverage, a 10% rise doubles your money. If you dare to leverage 20 times with that 8 million, you could directly reach over 100 million with the right market movement!'
Xu Ning was initially hesitant. He knew leverage was a 'double-edged sword,' but the trading records his friend showed on his phone — earning 2 million with a 300,000 investment last week — hooked his heart. 'Trying it out is fine,' he made excuses for himself, starting with 5 times leverage and opening a Bitcoin contract with 1 million.
That week, Bitcoin happened to rise from 40,000 USD to 45,000 USD, and his 1 million became 1.75 million. At the moment of closing the position, Xu Ning stared at the numbers on the screen, his palms sweating: 'So it really is possible to earn like this!'
2. Increased leverage: The 'gambler' lost in the frenzy.
After tasting sweet profits, Xu Ning's courage grew bolder. He successively transferred all the money from his spot account into his contract account, increasing the leverage from 5 times to 10 times, then to 20 times — he believed 'the higher the multiple, the faster the earnings,' and even began to mock the friends who had previously advised him to be cautious as 'too conservative.'
His trading frequency also increased. Previously, when trading spots, he would study candlestick charts and read industry news. Now, while trading contracts, he almost opened positions 'based on feeling': seeing Bitcoin rise in the morning, he would immediately go long; if it fell in the afternoon, he would quickly go short. The daily trading amount soared from initially hundreds of thousands to millions, sometimes entering and exiting three or four times a day, spending tens of thousands on transaction fees, but he didn’t care — 'As long as I can make a profit, what’s a little transaction fee?'
His family had advised him: 'Take some money out to buy a house, and you can play with the rest.' Xu Ning waved his hand: 'Wait until I make another profit and buy a villa in cash!' At that time, he was already intoxicated by profits, completely unaware that risks were approaching: of his 30 million, 12 million was borrowed from relatives and friends, and 8 million was a loan secured by real estate — he had placed all his 'bets' on contracts.
In mid-May 2021, the cryptocurrency market began to experience slight fluctuations. Experienced traders reminded Xu Ning to 'reduce positions for risk avoidance,' but he scoffed at them: 'Pullbacks in a bull market are all opportunities; it's just right to add positions to bottom fish!' On May 18, as he watched Bitcoin drop from 42,000 USD to 40,000 USD, he not only failed to reduce his positions but instead opened a 30 times leverage long position, thinking 'it has dropped enough, it should rebound now.'
3. The terror of 519: The desperate liquidation amidst the crash.
On May 19, 2021, as the morning sun just shone into Xu Ning's study, the moment he opened the trading software, his heart sank — Bitcoin opened lower, dropping from 40,000 USD to 38,000 USD within half an hour, and his long position was already showing a 15% loss.
'It’s fine, just a normal pullback,' Xu Ning gritted his teeth and transferred 2 million as margin, thinking 'if I hold on, it will rise back.' But the market didn't give him a chance: at 10 AM, news of 'strengthened cryptocurrency regulation' broke, causing the cryptocurrency world to explode — Bitcoin plummeted straight down, dropping below 35,000 USD in an hour, while Ethereum fell from 3,000 USD to 2,500 USD, with the entire market in the red.
In Xu Ning's account, the red warning of 'insufficient margin' began to flash frantically. He scrambled to close his position but found that the platform had lagged due to trading congestion — when he clicked the 'close position' button, the page kept loading, while the candlestick chart continued to drop. By the time he finally managed to close half of his positions, Bitcoin had already dropped to 30,000 USD, with losses exceeding 80%.
'If I add a little more money, maybe it will rebound!' Xu Ning's mind went blank. He began to call friends to borrow money, his tone choked with emotion: 'Help me raise 5 million, just this once, I’ll pay you back as soon as I make a profit!' But by this time, the cryptocurrency market was already in a panic, and no one dared to invest more money.
At 2:17 PM, Bitcoin fell below 28,000 USD. Xu Ning's contract account triggered the forced liquidation line — at the moment the system automatically liquidated, he watched his account balance change from '30,000,000 USDT' to '0.00 USDT,' and he slumped in the chair, unable to say a word for a long time.
The study was very quiet, with only the hum of the computer fan. He thought of the house he had mortgaged, the money he had borrowed from relatives, and the expectant looks from his family, suddenly covering his face, tears streaming through his fingers: 'How could over a decade of accumulation just disappear...'
4. The dust settles: Reflection after wealth reaches zero.
Half a month after the liquidation, Xu Ning locked himself in his study and hardly spoke. When relatives and friends came to demand repayment, he could only apologize repeatedly; his wife looked at his haggard appearance and didn’t scold him, but with red eyes said, 'Let’s start over, we’ll pay it back slowly.'
Later, someone asked him if he regretted it. Xu Ning nodded and then shook his head: 'What I regret is not trading contracts, but being too greedy — forgetting that leverage can amplify profits, but also amplify losses.'
On '519' in 2021, there were countless 'Xu Nings' in the cryptocurrency world: some went from a fortune of tens of millions to being deeply in debt, while others leveraged their positions with a fluke mentality, ultimately losing their entire principal. Xu Ning's story serves as a mirror — it reflects the cruelty of the cryptocurrency market and the greed of human nature: when you think you are 'controlling the market,' you have already been devoured by it.
Then someone might ask, why can so much money be lost in a day? Is it that terrifying? Below, Chengzi carefully points out the reasons for Xu Ning's liquidation and the misuse of leverage.
1. Cognitive level: Fundamental misjudgment of leverage risk.
The root of Xu Ning's liquidation lies in his focus on the 'profit amplification' aspect of leverage while deliberately ignoring its essence of 'loss amplification.' Initially attracted by a friend's statement of 'using 10 times leverage to earn 10% can double your money,' he later increased his leverage to 30 times, always believing that 'the higher the multiple, the faster the profit.' He completely failed to realize that with 30 times leverage, as long as the asset price fluctuates 3.3% in the opposite direction, it could trigger forced liquidation. This cognitive blind spot regarding risk put him on the brink of liquidation from the first day he engaged with contracts.
At the same time, the initial 'lucky profit' from 5 times leverage (earning 750,000 from 1 million) made him feel the illusion of 'being able to control the market,' mistaking the accidental profits during a bull market for his own trading ability. This cognitive bias directly led him to refuse to believe that 'even in a bull market, crashes can occur' during subsequent market fluctuations, even dismissing risk warnings from experienced traders as 'conservative,' completely losing his respect for the market.
2. Operational level: A series of irrational decision-making mistakes.
Extremely aggressive capital allocation: Xu Ning not only transferred all funds from his spot account into contracts but also leveraged by 'borrowing 12 million + mortgaging 8 million in real estate,' betting all 30 million (including a lot of debt) on contracts, without leaving any 'risk resistance funds.' This 'all-in' operation left him with no buffer space when the market experienced a slight pullback, forcing him to rely on 'supplementing margin' to hold on. If he couldn't supplement it, he would face liquidation directly.
The trading logic was completely out of control: from 'studying candlestick charts and reading industry news' in spot trading to 'opening positions based on feeling' (going long when it rises and going short when it falls) in contract trading, Xu Ning completely abandoned rational analysis. Especially on May 18, when signs of market fluctuations had already appeared, he not only failed to reduce his positions but instead opened a 30 times leverage long position, completely engaging in 'gambler-style bottom fishing' — having neither analyzed regulatory policy risks nor set stop-loss points, essentially handing his account's fate over to random market fluctuations.
Ignoring platform and liquidity risks: When the crash occurred on May 19, Xu Ning wanted to close his position but encountered platform lag, which was not accidental — during extreme market conditions, a large number of investors concentrating on closing positions can lead to trading congestion. He had never considered the issue of 'can the platform execute transactions in time.' This neglect of trading tool risks caused him to miss the last opportunity to reduce losses, and in the end, he could only watch helplessly as the system forcibly liquidated his account.
3. External level: Extreme market conditions and regulatory policies' 'fatal blow.'
Xu Ning's liquidation was also catalyzed by external circumstances. The 'black swan' event in the cryptocurrency world on May 19, 2021, was not an ordinary pullback: a piece of news about 'strengthened cryptocurrency regulation' directly triggered panic selling in the market, with Bitcoin plummeting over 30% in a single day (from 40,000 USD to 28,000 USD). Such an extreme situation, even without high leverage, would cause massive losses, and Xu Ning's 30 times leverage magnified this risk 30 times, ultimately becoming the 'last straw' that broke the camel's back.
It is worth noting that his previous indifference to 'policy risk' was also an important factor — as a cryptocurrency market that heavily relies on the policy environment, regulatory trends should have been the core risk point. However, Xu Ning was obsessed with short-term profits and never paid attention to related policy signals. Ultimately, when negative policy news came, he had no ability to respond.
3. Human nature level: The inevitable result of greed and fluke mentality.
From 'wanting to earn 100 million from 8 million' to 'wanting to borrow money to recover losses,' every decision Xu Ning made was driven by greed and fluke. When his family advised him to 'use part of the money to buy a house,' he thought about 'earning a bit more to buy a villa'; when facing a 15% loss, he hoped that 'holding out would lead to a rebound'; even with losses exceeding 80%, he still wanted to 'borrow 5 million to recover' — this 'reluctance to stop losses in time and always wanting to earn more' human weakness led him to repeatedly choose to 'gamble on,' ultimately pushing his 30 million wealth towards a zero conclusion.
Finally, Chengzi advised everyone to use leverage reasonably; contracts are not for getting rich overnight, but for continuous profits to better change one’s life!@区块橙哥 #机构筹资布局SOL #ETH走势分析
