A comprehensive guide to Gate ETF: How marginless leverage is transforming crypto investing?

Have you ever missed out on subsequent market movements due to forced liquidation in contract trading? Gate ETF might offer another answer. The core of this product is to achieve leverage effects through spot trading, allowing users to avoid managing margins and worrying about liquidation risks.

Its operation relies on a complex automatic rebalancing mechanism that can automatically adjust the underlying perpetual contract positions during market fluctuations to maintain a stable target leverage multiple (such as 3x or 5x).

01 Product Mechanism: From Complex Contracts to Simple Trading

The fundamental difference of Gate ETF lies in its product design philosophy. It is not a traditional exchange-traded fund, but a spot trading token with built-in leverage.

Users purchase tokens like BTC5L (5x long Bitcoin) or ETH5S (5x short Ethereum), just like trading any other cryptocurrency on the spot market.

The key is that this token is automatically constructed and managed by Gate’s system, which holds a basket of perpetual contract positions. When the underlying asset’s price fluctuates and causes the leverage to deviate from the target multiple, the system performs “rebalancing”: increasing positions when profitable, reducing positions when losing, to bring the leverage back to the preset level.

This design frees investors from the hassle of margin calculations, funding rate management, and liquidation risk warnings.

02 Risk Management: Eliminating the Fear of Liquidation

In traditional leverage or contract trading, liquidation risk is a Damocles sword hanging over every trader. A sudden sharp market reversal can force positions to be liquidated, even if the investor’s long-term trend judgment is correct.

Gate ETF removes this risk from the mechanism. Since the system automatically reduces positions during losses to lower actual risk exposure, there is no forced liquidation due to insufficient margin.

However, this does not mean there is no risk. The nature of the risk has shifted: from sudden, catastrophic liquidation risk to “wear and tear” risk caused by market oscillations.

In a choppy market, frequent rebalancing can generate trading costs, potentially causing the net asset value to slowly decay as prices fluctuate back and forth. Therefore, such products are more suitable for markets with clear trends.

03 Trading Experience and Costs: Minimal Operation and Clear Fees

The trading threshold is greatly lowered. Users do not need to enable contract trading permissions; a spot account is sufficient to participate, making the entire experience no different from buying Bitcoin.

The cost structure is also more transparent. Gate ETF does not charge the common funding rates seen in contract trading but instead charges a unified daily management fee of 0.1% to cover the costs of system rebalancing and hedging. For long-term holders, this daily fee is an important factor to consider.

In terms of product breadth, Gate ETF has built one of the most extensive product matrices in the industry. Currently, its ETF leveraged tokens support up to 348 cryptocurrencies, offering investors a rich selection of underlying assets and strategies (such as 3x or 5x leverage, long or short positions).

04 Core Differences from Other Products

Gate ETF differs fundamentally in mechanism from several common products.

Compared to traditional financial ETFs: Traditional ETFs (like those tracking the S&P 500) aim to replicate index performance without leverage, focusing on diversification. Gate ETF is a high-leverage exposure tool for a single asset, emphasizing volatility amplification.

Compared to crypto spot leverage: Spot leverage requires users to collateralize assets as margin and monitor leverage ratios and liquidation prices themselves. Gate ETF users do not provide or manage margins; the system’s automatic rebalancing mechanism avoids liquidation risks.

Compared to perpetual contracts: Perpetual contracts are direct derivative betting agreements involving funding fees, mark prices, and liquidation mechanisms. Gate ETF encapsulates contract strategies into spot tokens, so users do not directly face these complex concepts.

Compared to leverage tokens on other platforms: While many platforms have scaled back such products due to operational complexity, Gate continues to expand, supporting over 250 tokens, offering the broadest market choices. Its 0.1% daily management fee is also competitive within the industry.

05 Applicable Scenarios and Strategy Recommendations

Understanding the fundamental differences of the product ultimately helps in using it better. Gate ETF is a typical “trend amplifier.”

In strong trending markets with continuous upward or downward movement, its automatic rebalancing mechanism can effectively maintain high leverage exposure, helping investors capture returns far exceeding spot. Its no-liquidation feature also allows investors to “hold on” during sharp but short-lived market reversals.

However, in sideways or choppy markets lacking clear direction, frequent rebalancing can cause wear and erode principal. Therefore, it is not suitable as a “buy-and-hold” long-term product.

A wise strategy is to use it as a short-term tactical tool to express a strong bullish or bearish view on a specific asset within a defined timeframe. Meanwhile, investors should closely monitor the product’s real-time net value and leverage multiple, understand its rebalancing logic, and avoid passive exposure to excessive friction costs during complex volatile markets.

Future Outlook

A seasoned trader, after switching to using Gate ETF, found that his trading behavior subtly changed. He no longer needs to check his margin ratio every hour, and his stop-loss strategy shifted from rigid price-based risk control to judging whether the market trend continues.

His trading interface became remarkably simple, with only a few assets in his spot account bearing the “5L” or “3S” suffix. But he knows that behind these simple codes, the Gate platform system is executing complex rebalancing algorithms 24/7.

When the market shows a clear trend, these quiet codes will bring him substantial volatility gains.