We burned out trying to own the future.
Last week, a widely-followed investor named Butan posted that he had “used all his ammunition” to buy a 2x leveraged ETF on SK Hynix, the South Korean memory chip giant, after its stock plunged 25.72% in a single session. His rationale: the AI-driven demand for HBM (High Bandwidth Memory) represents a once-in-a-generation milestone, and short-term fear is a gift. The post went viral, cheered by retail traders who saw it as a badge of conviction.
But as someone who spent years decoding the ICO mania of 2017 and the yield-farming mania of 2020, I recognize the pattern immediately. This is not conviction. It is a narrative trap dressed in boldness. And the crypto world is full of identical traps—ones that quietly drain portfolios while feeling like principled bets on the future.
Context: The Narrative Machinery Behind the Trade
Let’s step back. SK Hynix is not a crypto asset, but its story mirrors every narrative-driven market we trade inside crypto. The company is the dominant supplier of HBM3E memory chips to NVIDIA, the poster child of the AI boom. The narrative is clean: AI needs compute, compute needs memory, and HBM is the highest-margin memory on earth. Investors who bought SK Hynix a year ago saw 400% returns—leveraged ETFs turned that into a 800%+ explosion. The emotional graph is a straight line up.
Then a rumour about NVIDIA cutting orders hit the tape. The stock collapsed. Butan saw the dip as a “milestone” opportunity to double down. Sound familiar? It’s the same logic that drove people to buy LUNA at $90, ETH at $4,800, or SOL at $260 during the last cycle. The narrative feels so strong that any price drop must be a gift from the market to the faithful. We burned out trying to own the future—only to discover the future was already priced in, and the dip was just the beginning of a deeper reset.
In crypto, the equivalent trade is buying leveraged perpetuals on a Layer-2 token like ARB or OP after a 25% correction, believing the “Ethereum scaling narrative” will eventually overcome short-term selling. The mechanism is identical: a leveraged instrument that amplifies both gains and the silent decay of volatility. Most traders never read the fine print on funding rates or volatility drag.
Core: The Silent Tax of Leveraged Instruments
Butan’s tool of choice—a 2x leveraged ETF—is deceptively dangerous. These products rebalance daily to maintain a constant leverage ratio. In a trending market, they work beautifully. In a choppy market, they suffer from volatility decay (also called “sigma decay”). Consider a simple example: an asset drops 10% one day, then rises 10% the next. A 2x ETF would drop 20% on day one, then gain 22% on day two. Net result: the underlying asset is back to even, but the ETF is down 2.4%. Over weeks of sideways oscillation, the decay compounds. Even if SK Hynix eventually returns to its previous high, the leveraged ETF may never recover.
During the DeFi summer of 2020, I interviewed twelve yield farmers who had leveraged their positions using flash loans and vault tokens. Every single one underestimated the “impermanent loss” and “borrowing rate oscillation” that silently ate their returns. The psychology is identical: you feel you are betting on a sure narrative, but the instrument itself is a leaky bucket.
Butan’s post ignored this entirely. He framed the trade as a long-term bet on AI, but a leveraged ETF is a short-term instrument by construction. Holding it for months exposes you to compounding decay that can erase gains even if the underlying thesis plays out. I’ve audited enough smart contracts to know that the same logic applies to leveraged tokens sold by crypto exchanges—tokens like ETHBULL or BTCUP—which rebalance daily and suffer the same mathematical drain. The narrative might be brilliant; the execution vehicle can still kill you.
Crypto’s Version: The Perpetual Funding Tax
In crypto, the equivalent of the 2x ETF is a long perpetual swap with 2x leverage. But instead of daily rebalancing, you pay a funding rate every 8 hours. During a bull market, funding tends to be positive (longs pay shorts). That means even if the price moves sideways, your position bleeds value. Over a month of consolidation, funding can cost 5-10% of your notional exposure. Many traders ignore this because the narrative soothes them. They tell themselves the dip is temporary. They believe the market will reward their patience.
But patience is not a strategy when the market charges you for holding. We burned out trying to own the future, but the future owned us via hidden fees.
When I wrote “The Illusion of Decentralized Wealth” in 2020, I documented how early DeFi users lost more to gas wars and impermanent loss than they gained in yield. The pattern repeats: every narrative cycle spawns a new class of instruments that appear to democratize access but actually extract value from impatience and ignorance.
Contrarian: The Blind Spot Butan—and Crypto—Share
The contrarian angle is not that AI or crypto narratives are wrong. It’s that the act of buying leverage after a crash is often a sign of emotional desperation, not strategic conviction. Butan’s own disclaimer—“Be cautious with leverage”—was immediately contradicted by his “used all my ammunition” declaration. This is cognitive dissonance masquerading as courage.
Moreover, the analysis of SK Hynix’s fundamentals ignored a massive blind spot: geopolitical risk. SK Hynix relies on ASML’s EUV lithography machines, which are subject to Dutch export controls. A single policy twist could delay capacity expansion. Similarly, in crypto, the narrative-driven bull case for a Layer-2 often ignores the risk of a regulatory crackdown on staking, or a smart contract exploit that drains liquidity. Butan’s post never mentioned geopolitics. Most crypto threads never mention regulations.
History repeats, but the memes change. The same narrative structure that propelled DeFi Summer now propels AI infrastructure plays. The same mistake—buying leveraged dips without understanding the instrument’s mechanics—will cost the next wave of believers.
Takeaway: Survival Over Narrative
The real takeaway for crypto investors is not to avoid narratives, but to choose instruments that match your holding horizon. If you believe in a long-term thesis, use spot holdings, not leveraged ETFs or perpetuals. The small gain from leverage is not worth the exponential decay risk. Survival matters more than gains—because if you survive, you get to trade another day. If you burn out trying to own the future, you won’t own anything.
Trust is the rarest asset. Leverage is the fastest way to lose it.
Next time you see a 25% crash in a narrative coin and feel the urge to “buy the dip” with 2x leverage, ask yourself: Am I betting on the future, or am I paying a hidden tax on my own impatience? The market doesn’t care about your milestones. It only cares about the math.
We burned out trying to own the future. Let’s not burn out trying to own the dip.