That's why you calculate your effective collateral price using the 200-week SMA when taking out a BTC-backed loan during a bull.
Or just maintain a ~40–50% safety buffer at all times.
I've been running leveraged BTC carry trades for years and this is my #1 risk management rule.
Never take out crypto-backed loans. Not even against Bitcoin. Here's my story from the October 10, 2025 crash.
Two months before the crash, I borrowed against 5 bitcoin:native (~$600K at the time) through Coinbase's Morpho lending service.
BTC was trading around $120K. My liquidation price was ~$100K. I figured I'd have plenty of time to add collateral or repay the loan if BTC started falling.
I couldn't have been more wrong.
On October 10, BTC plunged from $120K to $115K, $110K, then $102K within an hour.
I had enough USDC sitting on Coinbase to repay my entire loan. But Morpho stopped working. Repayment attempts failed.
I even tried liquidating other holdings and transferring additional funds. Nothing worked. 10 attempt to pay off the loan and all in vain.
At $103K, I genuinely thought my 5 BTC were gone. I was sitting at my desk contemplating how I would recover from this.
Fortunately, BTC rebounded near $102K. Once the platform stabilized, I repaid everything and withdrew my Bitcoin.
The lesson? Liquidation risk isn't your only enemy. Platform failure during extreme volatility can wipe you out EVEN WHEN YOU HAVE THE FUNDS TO SAVE YOURSELF.
Never again. No leverage. No crypto-backed loans. Not even Bitcoin.
@PerpetualCow You can still run a backend that neither logs nor retains IP addresses if you value your user’s privacy.
Or at least use short-lived keyed HMACs of IP addresses for rate limiting, store pub-key-encrypted IPs for future compliance with the private key on an offline device, etc.
@1818wizrd@niftyworld@krakensupport I don't make the rules. I went through this myself a few years ago.
It's financial repression of the serfs and exchanges file SARs to keep their licenses. They aren't to blame.
One recent US review found just one money-laundering conviction per few thousand of filed SARs. 🤷♂️
@niftyworld@krakensupport Duh.
You’re being investigated for money laundering. They’re not allowed to give you anything other than generic responses, potentially for many months even.
If they didn’t report users depositing large amounts of Monero, they’d speedrun losing their license.
@eelws29778 @CoinImpulse KYC-Leaks (Börsen/Banken), geleakte Steuerdaten (Finanzämter oder Steuertool-Leaks), Freundeskreis, öffentliches Flexen auf Social Media etc.
@molusol also, these in-house routers from gmgn, axiom, etc. often lack a lot of integrations, so especially for memes that are paired with RWAs, you often get a crazily worse price (e.g., using a 1%-fee pool on orca rather than a low-spread market on @ManifestTrade) on top of high fees.
@JStefanop1 the solution is shipping tamper-resistant devices, whether with external enclosures or internal mechanisms. there are several options available for this, even if it would decrease their margins/cause prices to increase by a bit.
@_Max____Max_@0xGeeGee to many, it seemed like the more secure option not to buy directly from a company that notoriously leaks their customers’ addresses 🤷
@Booksey but a (software) supply chain attack or insider job could result in malicious code reading your keys and transmitting them to the hacker(s) instead.
whether that’s more or less likely than what happened with Ledger here is up for debate...
@muzja999@CryptoLiam__@Ledger during the Ledger address leak fiasco, buying from authorized resellers in-store without KYC to avoid leaking your address was the recommended solution.
now suddenly that’s being called stupid.
every option has its own left tail: get robbed or end up with a manipulated device.