Traders working in traditional financial markets got the opportunity to open long and short positions in BTC with 2X leverage.
Investment management firms REX Shares (REX) and Tuttle Capital Management (TCM) launched two new exchange-traded funds (ETF), the T-REX 2X Long Bitcoin Daily Target ETF (BTCL) and the T-REX 2X Inverse Bitcoin Daily Target ETF (BTCZ). These are designed for experienced investors, allowing them to capitalize on BTC price movements in a similar way to using 2X leverage.
The essence of the new funds operation is as follows:
- The T-REX 2X Long Bitcoin Daily Target ETF allows holders to earn twice the daily increase in BTC price. If BTC rises 1% in a day, the fund’s shares will go up by 2%.
- The T-REX 2X Inverse Bitcoin Daily Target ETF lets holders earn twice the inverse change in BTC price. That is, if Bitcoin drops by 1% in a day, the ETF will increase by 2%. Conversely, if BTC rises by 1%, the fund will lose 2%.
Despite being based on spot BTC quotes, these assets use derivatives — swaps and futures — instead of the asset itself. BTCL and BTCZ are already available to market participants on the Chicago Board Options Exchange (Cboe).
The new investment products were added to the T-REX ETF series, which also includes similar financial instruments based on stocks of large-cap tech companies like Apple (AAPL), Nvidia (NVDA) and Tesla (TSLA). In June, REX Shares’ assets under management (AUM) topped $5 billion, with the T-REX funds up $1 billion since last year.The new REX Shares crypto ETFs charge a 0.95% management fee. In comparison, the average fee for spot Bitcoin ETFs, after promotional discounts expire, is about 0.2%. Spot Bitcoin ETFs were launched in the U.S. in early 2024 and, as of July 11, their total capitalization already exceeds $70 billion, according to Blockworks.
