Tết just passed, and I had to face the classic question again: what does it mean to “burn your account”? Haha, you know, this year there are two hot sayings online—one is “you copy Trump’s tail, and Trump copies your house,” and the other is “the unluckiest person in 2025 is someone who follows Trump.” Of course, if you end up losing money, you have to blame yourself—there’s no one else to blame. Anyway, Trump issuing crypto has also made crypto stand out more, so this Tết, more people at home asked me about crypto trading than usual.

I tried to avoid answering because… I’m still stuck, I haven’t made any money, and I’m afraid of being asked about things that make me sad. But the more I fear it, the more people ask—until finally a relative kept chasing after me, asking, “What does it mean to burn your account?” When I heard it, I shook; my hand holding a cigarette almost dropped. I wanted to run away because this topic is too painful. But he was extremely persistent, following me everywhere, even standing at the bathroom door waiting. He said that the most you can lose when buying crypto is just losses—so how could you lose everything and end up with your account at 0? Clearly, he was confusing crypto with stocks.

As I couldn’t avoid it, I decided to explain. “Actually, it’s very simple,” I said. “Suppose you have 10,000 yuan—buy bitcoin with 10,000 yuan, right? If bitcoin goes up 10%, you earn 1,000 yuan; if it drops 10%, you lose 1,000 yuan. This is called spot trading—just like buying stocks—so you won’t burn your account.”

“But if you open a leveraged contract with 9x leverage, it’s different. Your 10,000 yuan becomes 100,000 yuan, and you can buy bitcoin worth 100,000 yuan. If bitcoin goes up 10%, you make 10,000 yuan! That’s 10 times more than if you don’t use leverage.” He became interested right away. “But remember, when it drops 10%, you also lose 10,000 yuan—that’s your entire actual capital!”

“When your losses reach your actual capital, the exchange will automatically liquidate and recover the 90,000 yuan they lent you. That’s what ‘burning your account’ means—your actual capital goes to 0.” He stared with his mouth agape, unable to say anything. I knew that at this moment, a door in his life had opened—he could never go back to how things were before.

A lending exchange isn’t doing it out of kindness. They make money from transaction fees based on amplified trading volume, and they have no risk because they can automatically liquidate you to burn your account when needed. That’s why leverage is both attractive and dangerous. Profits can be 10 times higher, but losses can be too—and once your account is burned, there’s nothing left to come back from.