NEW YORK, NY / ACCESSWIRE / December 28, 2019 / Recently, MXC Exchange launched a leveraged ETF product – the 3x leverage Exchange Traded Fund (ETF) for BTC, ETH and EOS. Both long and short ones are available, and there is no forced liquidation. Crypto investors say “this is a product that will help users magnify their returns”.
According to the statistics, most retail crypto investors have only small positions on major currencies in their investment portfolios. This is due to the fact that major currencies are typically less volatile than altcoins. Instead, some small projects with high potentials are more popular among retail investors because their price are more volatile. Therefore, the bad coins drive out good ones. Compared with mainstream currency, altcoins are more prone to market situations where commodities are overpriced and they can not be purchased.
Small circulating amount and pool underlying technologies are the defects of altcoins. Focusing on the latitude of “speculation”, leveraged ETF can boost the development of mainstream currency while meeting the fluctuation demand and the utilization rate of its own funds (multiplied).
If someone is very confident about the market trend of mainstream currencies, they can use long or short ETF to gain profits.
Some users may already know something about leveraged ETF and some even have never heard of it. Next, MXC Exchange will explain in detail the use of ETF:
Now leveraged ETF on MXC Exchange supports the following products:
BTC3L refers to 3-times buy (long) of BTC. The “L” here stands for “Long”. In the same sense, BTC3S refers to 3-times sell (short) of BTC. The “S” here stands for “Short”.
For example, if a user has bought BTC3L product, and the price of BTC (the underlying asset of BTC3L) now increases by 10%, then the leverage ETF product – BTC3L will correspondingly rise by 30%. On the contrary, if BTC falls by 10%, the BTC3L will also decreased by 30%.
In addition, BTC3S reversed ETF is also called “short ETF” or “bearish ETF”. It provides the opposite performance of an index. Reverse ETF can also do 3-times leverage to amplify the performance caused by index drop. For example, if the price of BTC falls by 5%, then BTC3S will rise by 15%. If the price of BTC increases by 5%, BTC3S will falls by 15%.
Nevertheless, as for the primary investors with poor risk resistance, they should avoid using leverage and reverse ETF. If investors are confident in their judgment of market trends, such as the upgrade of Ethereum, the halving of bitcoin production, and the impact of Voice on EOS launch, leveraged ETF is a relatively practical tool.
In addition, unlike contract of high leverages, there is no forced liquidation for leveraged ETF products. There is a rebalancing system designed by the team of MXC Exchange. This system can adjust the investment portfolios for the leverage ETF products periodically to ensure the generally constant leverage times. Generally, the rebalance will be carried out in every 24 hours. Under special circumstances when price of the underlying asset undergoes great fluctuation which surpass the largest setting value (At the beginning, that is 15% for the losing side. In the future, the value may be different.), the team will carry out the rebalancing mechanism to control the risks of the investment portfolios.
The rebalancing mechanism is available for the losing side to protect the traders’ interest. If the BTC rises by 15%, the rebalancing system will work for the trader of BTC3S product.
According to the ETF intraday price rise and fall calculation table provided by the rebalancing mechanism of MXC Exchange, the double opening of long and short positions may have the special effect of avoid risks or even making small profits:
For example, suppose people spend $100 for BTC3L, and $100 for BTC3S. When the BTC increases by 100%, their BTC3L will increases by 300% (that’s $300). There is still remain $5.21 of their BTC3S product. After the deduction of the cost, people still earn $105.21. Though it is uncommon to witness the 100% gain of BTC, people cannot get rid of the possibility.
In general, when a bull market starts, people can also configure some leveraged ETF products since it will magnify user’s returns and maximize the asset use rate, which are totally different from altcoins.
In 2019, the competition among exchanges are fiercer than before. However, MXC Exchange has established a good reputation in the industry with its high-quality services and smooth trading experience. In addition, the innovative launch of the leveraged ETF products for major currencies like BTC, ETH, and EOS directly meets the demand of large number of users.
Leveraged ETF is a product for both long-term and short-term investment of major currencies.
Organization: MXC PRO FOUNDATION LTD
SOURCE: MXC PRO FOUNDATION LTD
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