Bitcoin

Daily

On July 10, investment managers REX Shares and Tuttle Capital Management launched two new exchange-traded funds (ETFs) that enable high-conviction Bitcoin&nbsp;traders to double down on long or short positions with 200% exposure to Bitcoin’s price volatility.&nbsp;
The <a href="https://www.businesswire.com/news/home/20240710680336/en/REX-Shares-and-Tuttle-Capital-Management-Launch-2X-Leveraged-and-Inverse-Spot-Bitcoin-ETPs" target="_blank" rel="noopener nofollow">two funds</a>&nbsp;— the T-REX 2X Long Bitcoin Daily Target ETF (CBOE: BTCL) and the T-REX 2X Inverse Bitcoin Daily Target ETF (CBOE: BTCZ) — do not hold spot Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>)&nbsp;directly. Instead, they use financial derivatives to deliver 2x leveraged or inverse exposure to spot BTC.
Bitcoin ETFs have seen white-hot inflows in the past week amid a sharp pullback in spot prices spurred by multibillion-dollar BTC liquidations by Germany’s government and Mt. Gox, the defunct Japanese crypto exchange. Approximately $650 million has flowed into BTC ETFs since July 5, <a href="https://farside.co.uk/?p=997" target="_blank" rel="noopener nofollow">according</a> to Farside Investors.
Related: <a href="https://cointelegraph.com/news/spot-bitcoin-etf-inflows-654-million-over-three-days">Spot Bitcoin ETFs buy up $654M of BTC in 3 days</a>
The ETFs bolster REX Shares’ existing suite of “T-REX” products, which include funds offering leveraged exposure to mega-cap technology stocks such as Apple (AAPL), Nvidia (NVDA) and Tesla (TSLA). In June, REX Shares surpassed $5 billion in assets under management (AUM), with its T-REX funds pulling upward of $1 billion since last year.
Leveraged ETFs tend to significantly underperform relative to the underlying spot asset as well as other strategies for gaining leveraged exposure to asset prices, according to a <a href="https://www.gsr.io/reports/understanding-the-perils-and-potential-of-leveraged-etfs/" target="_blank" rel="noopener nofollow">report</a>&nbsp;by crypto trading firm GSR Markets. 
The report said this is partly due to a phenomenon known as the constant leverage trap, whereby funds are forced to buy low and sell high to maintain a fixed leverage target. Leveraged ETFs also tend to charge relatively high management fees, adding an additional drag on performance. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/9d62eb04-068a-4e48-b6b0-cd99242263dd.png" alt="High-conviction Bitcoin traders targeted in new long BTC ETFs" title="">
 <figcaption style="text-align: center;">
 Leveraged ETFs tend to underperform in the long run. Source: GSR
 </figcaption>
</figure>
Rex Shares’ two new ETFs each charge management fees of 0.95%. That is significantly higher than spot BTC ETFs — such as Franklin Templeton Digital Holdings Trust (EZBC), VanEck Bitcoin Trust (HODL) and iShares Bitcoin Trust (IBIT) — which will charge fees of around 0.2% on average once promotional discounts expire. 
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-layer2-sidechains-not-really-bitcoin-l2s/">‘Bitcoin Layer 2s’ aren’t really L2s at all: Here’s why that matters</a>

High-conviction Bitcoin traders targeted in new long BTC ETFs

Cointelegraph

Andre artikler udgivet 10. jul. 2024

Bitcoin Poised for 300% Gains by 2026 Despite Current Downturn, Analyst Predicts

Ethereum finally breaks above $3K: How ETH was able to regain its highs

ETH Futures Skyrocket to 3.1M, Hinting at Ethereum ETF Approval!

Cardano’s Blockchain Gaming Debut with ‘Chronoshot’ on Epic Games

Bulls Show Resilience as SOL & AVAX Rebound Despite German BTC Fears

Better Than Polygon as an ETH Layer 2

Join our free newsletter for daily crypto updates!