Leverage is a financial strategy where an investor uses borrowed funds to increase the amount of capital they can invest, thus magnifying potential returns. This can be particularly common in trading activities, including in crypto markets where traders may use leverage to increase their exposure to price movements without committing all their own capital. For example, if a trader uses 10x leverage, they can control $10,000 worth of an asset while only investing $1,000 of their own money, effectively magnifying both the gains and losses.