Becker Business Podcast Summary

Episode: Bitcoin & Leverage 12-2-25
Host: Scott Becker
Date: December 2, 2025

Episode Overview

This episode of Becker Business, hosted by Scott Becker, centers on the risks and mechanics of using leverage when investing in Bitcoin. Scott discusses how even small shifts in Bitcoin's price can wipe out investors who buy Bitcoin using borrowed funds—especially when leveraging opportunities on foreign exchanges. He also contrasts leverage policies on U.S. and international exchanges, referencing the spectacular (but volatile) returns and losses exemplified by companies like Michael Saylor’s MicroStrategy (now called Strategy). The discussion is designed to explain why significant losses occur despite Bitcoin maintaining relatively high prices historically.

Key Discussion Points & Insights

1. Why Bitcoin Investors Get Wiped Out

Leverage Explained:
Scott explains that many Bitcoin investors use leverage available mainly on foreign exchanges, allowing them to control large positions with minimal upfront cash.
- Example:
  - Put down $2,000 to control $100,000 in Bitcoin (using 50:1 leverage).
The Math of Gains and Losses:
- High Upside:
  - If Bitcoin goes from $100,000 to $120,000, the investor’s $2,000 becomes $22,000—a tremendous gain.
- Devastating Downside:
  - If Bitcoin drops to $98,000, the original $2,000 is erased—position wiped out.
  - If it drops further to $90,000, the investor now owes $8,000 to the exchange.

"You could put down $2,000 to buy a hundred thousand in bitcoin. So if the bitcoin at a hundred thousand you bought, it goes to 120,000, you've literally made about $20,000 on your 2000. That's a great win, a huge plus. But if bitcoin goes down...your position is totally wiped out."
— Scott Becker [01:08]

2. The Impact of Exchange Rules on Leverage

Foreign vs. U.S. Exchanges:
- Foreign exchanges often allow up to 100x leverage.
- U.S. exchanges have stricter limitations, reducing exposure to catastrophic losses.
- Many investors wiped out on foreign exchanges lack the capital to cover rapid downturns.

"In the US Exchanges, you're much more limited in your leverage...But in the foreign exchanges, they allow you to often leverage things as much as 50 to 100%."
— Scott Becker [02:08]

3. Lessons from MicroStrategy (Strategy) and Michael Saylor

Leverage at Scale:
- Michael Saylor’s company (now Strategy) has been a top Bitcoin performer through aggressive leverage.
- Despite Bitcoin dropping 11% this year, Saylor’s fund dropped 50%—demonstrating leverage’s magnified risk.

"Leverage is why bitcoin guru Michael Seiler. Michael Saylor has this company, MicroStrategy, now called Strategy...even though bitcoin is down 11%, he's down and his fund is down 50%. It's because of the use of leverage."
— Scott Becker [02:44]

4. Scott Becker’s Perspective on Leverage

Leverage: Double-Edged Sword:
- Scott expresses personal caution:
  - "I'm not a believer in leverage to buy stocks, but some people are. But it's the extent of the leverage that's really killing people."
- Many investors don’t realize their risk until it’s too late.

Notable Quotes & Memorable Moments

On investor wipeouts:

"This is why some investors have been truly wiped out by investing in Bitcoin and using leverage to do so."
— Scott Becker [03:12]
On leverage’s danger:

"It's the extent of the leverage that's really killing people."
— Scott Becker [03:04]

Timestamps for Important Segments

00:33 – Why small moves in Bitcoin can wipe out leveraged investors.
01:08 – Illustration of leveraged gains and devastating losses.
02:08 – Differences between U.S. and foreign exchange leverage policies.
02:44 – MicroStrategy and Michael Saylor: Leveraged Bitcoin bets and volatile results.
03:04 – Scott Becker’s warning about leverage.
03:12 – Concluding insight on why investors get wiped out.

Episode Takeaways

Using leverage on Bitcoin—especially on lightly regulated foreign exchanges—enables both outsized gains and catastrophic losses on modest price swings.
Even experienced, high-profile investors and funds can suffer severe losses from poorly managed leverage.
Leverage should be approached with extreme caution, as even small negative moves can erase invested capital and create additional debt.

This episode is a cautionary look at the realities of leveraged cryptocurrency investing, closing with Scott Becker’s characteristic clarity and skepticism on excessive risk.

Transcript

A (0:00)

This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We try and be your rapid go to place for efficient business and private equity information. Today's discussion is bitcoin and leverage. So you hear a lot about bitcoin investors getting wiped out, even though bitcoin remains pretty high levels compared to where it's been at historically. And this is a discussion on bitcoin. I'm not really that much of a bitcoin investor, but I'm curious why people are getting wiped out when there's relatively small moves in bitcoin. And here's why this happens, here's why people are getting wiped out. On foreign bitcoin exchange. Just like finance, you can use leverage to buy bitcoin at numbers as high as 50 to 100%. So for example, you could put down $2,000 to buy a hundred thousand in bitcoin. So if the bitcoin at a hundred thousand you bought, it goes to 120,000, you've literally made about $20,000 on your 2000. So that's a great win, a huge plus. But if bitcoin goes down and it's down about 11 this year and down this past month, if it goes down, you put down 2,000 by a hundred thousand. If it goes down to 90, 98,000, at 98,000, your position is totally wiped out because you've, you've lost the 2000 on the hundred thousand, which is 2000 you put in. Now, if it goes down to 90,000 and you had put in 2000 and you had started a hundred thousand, you now owe the lender or exchange $8,000. This is why small movements have a very big impact. Either way, many of the investors in bitcoin, that's why I see people talking about being wiped out and so forth and so on, don't have the ability or the finances to back up those losses. And the US Exchanges, you're much more limited in your leverage, your ability to leverage things. But in the foreign exchanges, they allow you to often leverage things as much as 50 to 100%. Leverage is why bitcoin guru Michael Seiler. Michael Saylor has this company, MicroStrategy, now called Strategy, that has been one of the home runs of bitcoin over the last few years, has been up tremendously this year, even though bitcoin is down 11%, he's down and his fund is down 50%. It's because of the use of leverage. And that's not good or bad. Of course, I'm not a believer in leverage to buy stocks, but some people are. But it's the extent of the leverage that's really killing people. This is why some some investors have been truly wiped out by investing in Bitcoin and using leverage to do so. We hope you find this informative. Thank you for listening to the Becker Private Equity and the Vector Business Podcast. We encourage you always to buy our new book that's coming out on Amazon. Building great businesses, great momentum, overcome setbacks, and scale with confidence. Please pre order the hard cover on Amazon when you can. If you're the first person to listen to this all the way through and you enjoyed it, I will send you a 25 gift certificate that you can use to buy that book. 773-766-5322 thank you so much for listening.