What is a leveraged spot bitcoin ETF? | Headlines | News | CoinMarketCap

04/19/2024 01:05
What is a leveraged spot bitcoin ETF? | Headlines | News | CoinMarketCap

A leveraged spot bitcoin exchange-traded fund (ETF) aims to multiply returns of the daily performance of bitcoin.  …

A leveraged spot bitcoin exchange-traded fund (ETF) aims to multiply returns of the daily performance of bitcoin. 

It enables investors to boost their bitcoin exposure by using leverage, which is borrowed funds that increase the size of an investment position. Leveraged spot bitcoin ETFs can potentially generate higher returns if bitcoin's price moves in the owner's favor. However, leverage also magnifies losses in the same proportion.

How does it work? 

A leveraged spot bitcoin ETF typically uses financial derivatives, such as futures contracts, to multiply the daily returns of bitcoin.

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