Two times leverage, Five Times leverage - What does "leverage" mean in the world of crypto?

[Fidelia]

Crypto traders say they are using five times leverage or two times leverage to trade. What is leverage in crypto trading and what determines the degree of Leverage that one can use to trade? When does one need to use Leverage in crypto trading?

 

[Suba]

In the crypto world, leverage refers to borrowed funds from a broker, if a trader activates the leverage feature, then he will be able to increase his capital capabilities such as if you choose 5x time leverage then with a capital of $ 1k you can trade as if you have a capital of $ 5k which means you get a loan 4 times.

 

[riberet19]

Leverage is like borrowing money from the broker to make a trade, if you leverage yourself x10 for example, it will be like asking for 10 times the money you were willing to trade in the first case, if you make a $10 leveraged x10 trade, your trading volume would be $100

 

[kit_hung]

What is leverage in crypto trading and what determines the degree of Leverage that one can use to trade? When does one need to use Leverage in crypto trading?

In short, leverage is like borrowing money from your broker so that you can invest more than you have yourself.

Think of it this way: You want to break a coconut with a wheel. Your hands alone won't do the job, but if you use a lever, you can do the job with less force. That's where "leverage" comes in—you increase your force.