The risk reward ratio of such leverage increases over time. In the long run, guaranteed rekt…

The main problem with leverage is improper planning, commonly the false assumption that Bitcoin price won’t plummet or that other activities will bring steady income to service leverage interest. 

When it comes to debt, most people should probably have some in order to maximize bitcoin returns. But not too much! Taking on debt denominated in dollars was typically only wise for things like houses and sometimes education, but in the Bitcoin world, there is an non-zero interest rate at or below which even buying groceries with debt makes sense. But securing a loan with bitcoin gives terrible rates. 

Thought process: should one buy bitcoin or a house? Bitcoin. 

Ok, so you bought a house. Should you buy Bitcoin or a car? Bitcoin. 

Ok you bought a car. Should you DCA in to bitcoin now, or sell all your possessions and yolo in. You should yolo. 

Ok, you’re on the DCA path. Should you borrow from home equity to buy Bitcoin or should you just keep DCA.

So you just keep DCA. Then someone says: shouldn’t you diversify your assets? No. 

So you diversified your assets, but kept half your stack and kept stacking, but at a lower rate. 

All of these “safe” choices turn out to be very very costly. But it’s true this path minimizes risk. But this is the path most of us choose and I’m guilty of it. 

If I would have borrowed $10,000 from the bank of mom and dad in 2010, I’d be a billionaire. But I’m risk averse and stupid.