This week saw the launch of the T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF, and options trading for both products—which use derivative swaps to monitor the market price of Bitcoins—started. The companies that are responsible for this action are REX Shares and Tuttle Capital Management.
This project is still awaiting the sanction of the US Securities and Exchanges Commission (SEC); even then, this is a prospective attempt to boost the options trading based on the spot price of Bitcoin.
These launches aim to help investors leverage the possibilities of the general volatility of the cryptocurrency market.
T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF
T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF are two exchange-traded products launched to target the risk-loving traders of the US market. They are the two most volatile ETFs available on the US market.
These ETFs, launched by REX Shares and Tuttle Capital Management, provide double the exposure to top cryptocurrencies despite the market’s volatility.
T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF provide 200% and -200% exposure to Bitcoin’s daily performance using the “Reference Assets”.
According to the COO of Rex Financials, Scott Acheychek, these spot ETFs are powerful tools for equipping traders to capitalize on the ever-changing Bitcoin market. These exchange-traded products can contain price fluctuations of up to 200%.
These launches are the aftereffects of the launch of Bitcoin ETFs in January this year. The firms are all set to leverage the increase in the trading volume and the market’s gain of $50 billion in assets under management.
Matt Tuttle, the CEO of Tuttle Capital Management, views these projects as the means to epitomize their commitment to widening the boundaries of the ETF landscape.
More About Bitcoin ETFs
Bitcoin ETFs are exchange-traded funds that capitalize on the market demand for Bitcoin. These funds are created by pooling together Bitcoins and selling them on a traditional exchange rather than a cryptocurrency exchange.
The price of the shares of Bitcoin fluctuates with rise and fall in the price of Bitcoin. These ETFs are advantageous because of the following factors.
Convenience: Bitcoin ETFs are more convenient for investors than investing in cryptocurrency exchanges because they do not have to look further into the technical side of selling cryptocurrencies.
Diversification: There is scope for diversification on ETFs as they can hold more than one fund. This diversification can help them mitigate the risks of failure of any one type of fund.
Tax Efficiency: The fact that Bitcoin ETFs are traded on traditional exchanges is enough to make them taxable and in turn make them investor-friendly.
Despite these advantages, Bitcoin ETFs also have certain disadvantages too.
Management Fees: Most traditional exchanges charge high rates as management fees.
The Inaccuracy in the Price Calculations: If a particular trader has multiple funds in their portfolio, a definite reflection of the price rise of Bitcoin may not be visible on their portfolio.
Limitations: The major limitation of Bitcoin ETFs is that they cannot be traded in exchange for other cryptocurrencies. They can only be a reflection of the price changes of Bitcoin in the market.
Lack of Ownership of Bitcoins: Bitcoins are decentralized tokens and are not owned by any central banks or authorities. They have native methods to secure the tokens and offer freedom to their users due to their decentralized method.
But Bitcoin ETFs are under the control of a centralized authority, which denies these freedoms to the traders.
What are the Future Prospects of Bitcoin ETFs?
Bitcoin ETFs or any other cryptocurrency ETFs have a good scope in the coming years due to more investors venturing into the decentralized financial sector.
The launch of the options trading platforms T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF are testimony to the bright future of Bitcoin ETFs.
If these funds are given timely approval by the US SEC or other regulatory bodies, the transition of the decentralized market to include the benefits of the traditional market will be swift.
