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Have you heard of leverage on top of leverage? Now there's a new trend gaining popularity in the crypto circle.
A platform has launched a "fund account," which is actually borrowed from traditional finance, but it's just starting to become popular in the crypto world. Simply put, it allows traders to borrow more capital to amplify their operations — this instantly lowers the barrier for those who want to make aggressive bets.
Here's how it works:
1) User applies for a fund account
2) The platform provides a credit limit based on your initial funds
3) You can use this money to trade, and leverage effects come into play
4) Profits and losses are distributed proportionally
This has been standard on Wall Street for a long time, and now crypto is adopting this approach. It offers traders more opportunities, but the risks are indeed significant.