BitOffer Institute: Leveraged But Never Being Liquidated-How Bitcoin Leveraged ETF Works
On February 22nd,2021, Bitcoin once had a breakthrough to $58,000 and reached a new ATH, then started dumping. The plummet dropped down Bitcoin by more than $10,000, liquidation situations happened much more frequently. The data showed that on that day, the total liquidations were valued at 30.8 billion USD, which was even more serious than that on March 12th,2020. After then, only helpless left.
Most traders are stuck with futures trading due to that with leverages, limited investments can be magnified infinitely to bet for unlimited profits. However, margin traders always put the side of earning leveraged profits in front of themselves, but ignore the risky side. As leveraging 100x brings 100x profits, 100x risk follows.
Frequently massive liquidations happening is an unhealthy factor that hinders the development of the market. Thus, to fix such a puzzle, increasing the threshold is no longer an efficient solution in such a free market. An efficient solution shall be made from the aspect of the products.
Then, HOW?
BitOffer first launched Bitcoin Leveraged ETF which supports investors to long or short but never charges for margins, which makes the situation of being liquidated not be able to happen. Moreover, even it is a kind of Bitcoin ETF, BitOffer does not charge management fees, unlike the ETP on Huobi Global or MXC. BitOffer believes that charging this kind of fee does harm to users’ experience in a long run. In addition, the mechanism of “Positions Automatic Adjustment” of BitOffer Leveraged ETF promises the profits will be at least 3x, and even more than 17x. When the market goes one side extremely, the expected profits of BitOffer Bitcoin ETF is much considerable than opening long on Bitcoin Futures. In this way, Investors not only enjoy the leveraged profits but also defuse the risk of being liquidated.
BitOffer leveraged ETF has a 3x leverage, but it is naturally different from 3x futures trading. BitOffer leveraged ETF is a leveraged coin which means margin is not required, and it keeps liquidation outside. If a margin traders open 3x long on Bitcoin Futures, when the Bitcoin price drops by 33%, money is gone.
As for now, BitOffer has already launched Bitcoin and Ethereum ETF:
BTC3X means Open 3X Long BTC;
BTC3R means Open 3X Short BTC;
BTCR means Open 1X Short BTC;
ETH3X means Open 3X Long ETH;
ETH3R means Open 3X Short ETH;
ETHR means Open 1X Short ETH.
So, How Do I Trade BitOffer Leveraged ETF?
Trading BitOffer Leveraged ETF is almost the same as trading cryptocurrency on the spot trading market. The only difference is that it supports investors to long or short a coin. Buying BTC3X if expecting a bull market, buying BTCR or BTC3R if expecting a bear market.
Then, How Do I Calculate My Profits?
For instance, the Bitcoin price is $50,000, and you predict that it will have an increase soon. At that time, the net value of BTC3X is 100 USDT. Then you buy 100 BTC3X, the total value is 10,000 USDT. On the second day, the Bitcoin price pumps to $55,000 (+10%). Since BTC3X has a 3X leverage and a mechanism of “Positions Automatic Adjustment”, the net value of BTC3X will be above 130 USDT, which means you make a 30% profit. What is more, if the market only moves up by one side, the profits will be up to 1,700% due to the “Positions Automatic Adjustment” mechanism.
Overall, BitOffer Leveraged ETF is almost a perfect alternative to Cryptocurrency Futures. While it leverages investors’ profits, the risk of being liquidated is erased. With the advantages it has, retail investors and institutions take BitOffer Leveraged ETF as the preference.
As more and more traders chose BitOffer Leveraged ETF, its total purchase in 2020 reached a peak at 10 billion USD. Professional traders from Coinbase, BitMEX, Kraken noticed it and stretched their hands into BitOffer Leveraged ETF to earn massive leveraged profits but avoid the risk of being liquidated at the same time.
