You're making me think that maybe I shouldn't have sold puts on DOGE, levered myself up 20x, and wait for it to go to the moon. There's no way I can lose!

Notice that borrowing != trading on margin, you can certainly buy back into the asset, but you can also do lots of other things with the money. You can be careful with your borrowing, like the example I gave, in that case, Bitcoin would need to drop by 50% before that person get's liquidated and even if that happens, they still have the 82M$ in cash.

>> You can be careful with your borrowing, like the example I gave, in that case, Bitcoin would need to drop by 50% before that person get's liquidated and even if that happens, they still have the 82M$ in cash.

Not quite...now you still owe capital gains tax on the forced liquidation price (minus cost basis)! So perhaps a large part of your $82M draw goes into taxes.

At least in a bull market, it seems safe to assume that an asset like BTC or ETH will not suddenly decrease by over 50%.

It is definitely not safe to assume anything in the incredibly corrupt and manipulated cryptocurrency markets.