I had purchased some bitcoin (BTC) from coinbase.com and transferred it all to Derebit.com to buy perpetual contracts with. Basically leveraging it up to 100x. It works similar to stock trading with margins. Obviously, each move up or down is magnified when trading in this way. Depending on how much is leveraged, Derebit.com gives a price where, if BTC dips to, they will start to liquidate or sell all of one’s position. This happened to me. Let’s say I had 1 BTC that I bought for $10,000 and I leveraged that to buy $50,000 of BTC and my liquidation point is set at $8,000. BTC drops to $8,000, Derebit liquidates my 1 BTC and i’m left with nothing. How would I record this loss?
