Gate ETF: Launching a New Leveraged Crypto Investment Strategy on Gate

In 2025, a core characteristic of the cryptocurrency market is the parallel development of mainstream adoption and financial productization. When giants in traditional finance such as BlackRock and Fidelity introduce Bitcoin into millions of retail investors’ stock accounts through ETF, a more flexible and powerful tool—Gate ETF leveraged tokens—is redefining the risk and return landscape of digital assets in the professional trading space.

01 Product Core: What is a Cryptocurrency ETF and Its Evolution

The essence of a cryptocurrency ETF is packaging digital assets into standardized fund shares listed and traded on securities exchanges. It allows investors to gain exposure to Bitcoin prices without directly purchasing or holding the underlying asset through traditional brokerage accounts.

These products mainly fall into two categories. The first is spot ETFs, which directly hold and store underlying assets like Bitcoin, aiming for precise price tracking. A typical example is iShares Bitcoin Trust (IBIT).

The second is futures-based ETFs, which gain exposure indirectly through investing in derivatives like futures contracts. For example, ProShares Bitcoin Strategy ETF (BITO). These tend to be more complex and may have higher tracking errors.

The key advantage of ETFs is that they lower investment barriers and security risks. Investors do not need to manage private keys and can buy fractional Bitcoin shares with just a few hundred dollars. Meanwhile, assets are custodied by regulated professional institutions, reducing security risks by approximately 80% according to assessments.

02 Advanced Tool: How Gate ETF Leveraged Tokens Work

Within digital asset exchanges, the concept of ETF has evolved creatively. The ETF leveraged tokens offered on the Gate platform are innovative products that embed leverage functionality within the token structure.

The main difference from traditional ETFs is their goal: not merely tracking asset prices but amplifying their gains and losses by a fixed multiple. Users can trade these tokens just like spot assets, without margin requirements or the risk of forced liquidation, enabling leveraged trading.

For example, on the Gate platform, the naming convention for the most common products is: BTC3L—a bullish token anchored to Bitcoin offering 3 times returns; ETH5S—a bearish token anchored to Ethereum offering 5 times returns.

This constant multiple maintenance relies on an automated mechanism called “rebalancing.” The fund manager dynamically adjusts positions daily in the underlying perpetual contract market based on price fluctuations and net asset value changes, ensuring the actual leverage remains close to the target (such as 3 or 5 times).

03 Platform Operations: How to Trade ETF Leveraged Tokens on Gate

Trading ETF leveraged tokens on the Gate platform is as straightforward as spot trading.

Whether via App or web, users can easily find the entry point in the trading interface. On the App, the typical path is to click 【Spot】→【ETF】 to access the dedicated section.

On the trading page, users only need to input their desired buy price and quantity, then click buy or sell. This means even investors unfamiliar with derivatives trading rules can participate in leveraged trading with familiar spot interface with just one click.

After order execution, the position will be displayed in the user’s asset account. The entire process is clear and intuitive, with no additional margin management or forced liquidation monitoring required.

04 Strategic Thinking: Building Investment Portfolios with Gate ETF

For investors with different risk preferences, Gate ETF leveraged tokens offer a variety of strategic construction possibilities.

For those seeking to amplify gains in a rising market, bullish leveraged tokens like BTC3L, ETH5L can be chosen. When Bitcoin’s price rises by 1%, BTC3L’s theoretical net value increases by approximately 3%.

In volatile markets or during expected downturns, bearish leveraged tokens such as BTC3S or ETH5S serve as effective hedging or profit tools. They enable investors to gain significant returns even in bear markets.

More advanced strategies include multi-position long and short combinations. For example, investors can hold both BTC3L and BTC3S simultaneously. During uncertain sideways markets, profits from one side can hedge losses from the other, or volatility can be exploited for structural gains.

05 Risk Awareness: Understanding the Double-Edged Sword of Leverage and Long-term Decay

It is crucial to recognize that leverage amplifies both potential gains and risks. If the underlying asset’s price drops by 10%, a 3-times bullish leveraged token’s net value could decline by about 30%, while a 5-times leveraged token could lose up to 50%.

ETF leveraged tokens also carry a unique risk: volatility decay. Due to the daily rebalancing mechanism, in markets with repeated oscillations that ultimately return to the starting point, the net value of leveraged tokens can experience irreversible decay.

For example, if Bitcoin’s price rises 10% on the first day and then falls 10% the next day, its price from $100 drops to $99, a 1% decline. However, BTC3L’s net value might change as follows: rise 30% to $130 on the first day, then fall 30% to $91, resulting in a total loss of 9%, far exceeding the underlying asset’s decline.

Therefore, these products are more suitable for capturing clear short-term trends and not recommended as core assets for long-term holding. Investors should view them as tactical tools rather than strategic positions.

06 Investment Discipline: Risk Control and Self-Assessment Before Entry

Before engaging in Gate ETF leveraged tokens, establishing a strict personal risk management framework is essential. The primary principle is to only invest idle funds, and the invested amount should be within a range that, even if lost entirely, would not affect normal life.

Due to high volatility, setting clear stop-loss and take-profit points is critical. It is recommended to use proportional stop-loss methods, such as automatically selling when the net value retraces 15% or 20% from its high, to lock in profits or limit losses.

Given the volatility decay characteristic, avoid holding onto positions long-term due to short-term losses. If the market moves contrary to expectations, a wiser approach is to admit mistakes and exit promptly rather than hoping for a reversal.

Continuous learning is the only way to cope with this rapidly changing market. The Gate platform offers abundant educational resources. Investors should deepen their understanding of rebalancing mechanisms, funding rates, and other concepts, and comprehend the deeper reasons behind daily net value fluctuations to make more rational decisions.

Future Outlook

By the end of 2025, the list of ETF leveraged tokens on the Gate platform continues to expand, covering popular assets such as Bitcoin, Ethereum, SOL, DOGE, XRP, and more. These tokens often have 24-hour trading volumes reaching several million dollars, demonstrating their importance as tools for active traders.

From SEC-approved spot Bitcoin ETFs in the US to sophisticated leveraged tokens on the Gate platform, digital assets are integrating into the global investment landscape through diversified financial forms. Here, investment barriers are lowered, but decision-making complexity remains.