Traders working in traditional financial markets got the opportunity to open long and short positions in BTC with 2X leverage.
![Leveraged Bitcoin Derivatives Appeared on Cboe](https://coinspaidmedia.com/wp-content/uploads/2024/07/leveraged_bitcoin_trading_tools_appear_on_tradfi_market_main.jpg)
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.