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.