Margin-Free Trading, Maximizing Capital Efficiency. Compared to traditional cryptocurrency leveraged and futures trading, participating in ETF trading offers users higher capital efficiency. This is mainly because when trading ETFs, similar to spot trading, users do not need to deposit margins, which allows for a greater utilization of funds.
Trading is Simple, with Built-in Leverage to amplify returns. The ETF trading mechanism operates similarly to spot trading. Users can simply buy or sell their target long or short ETF positions without any additional steps, ensuring streamlined trading experience. For instance, take ETF varieties BTC3L and BTC3S as examples. If you want to engage in trading, you can simply keep an eye on the net values of BTC3L and BTC3S, then input the desired purchase quantity. Although the trading mechanism resembles spot trading, XT ETFs come with built-in leverage. This leverage offers the potential for doubling profits without the need for borrowing or margin, making them more advantageous compared to cryptocurrency leverage or futures trading.
Compound Interest. The XT ETF's rebalancing mechanism enables it to benefit from compound interest in unilateral market trends (either rising or falling). The profitable portion of the position is automatically reinvested into the total position after daily fixed rebalancing. Users can capitalize on compounding effects for greater returns during one-sided market trends, making XT ETFs naturally suitable for trending markets.
No Liquidation, Manageable Risk. Since no margin is required to initiate trades, XT ETF carries no liquidation risk. The ETF's risk is thus effectively managed through its rebalancing mechanism. Take ETF product BTC3L as an example: only when the underlying asset BTC's futures changes by 33% would the ETF go to zero. However, in practice, when the BTC futures fluctuates beyond a certain threshold (e.g., 10%), the rebalancing mechanism automatically adjusts the positions, preemptively mitigating futures risk and restoring leverage ratio to 3x.
