How it magnifies results

Gains and losses are both multiplied. At 10x, a 5% move in your favor makes 50% on your margin, and a 10% move against you wipes it out. Exchanges also charge funding or interest on leveraged positions.

Why it is risky

Crypto can move 10% in hours. Highly leveraged traders are liquidated in such swings, and cascades of liquidations can push prices further. Most retail traders who use high leverage lose money.