Since the first Spot Bitcoin ETF product went live on January 11, the funds have had a net inflow of more than $12 billion. Alongside the upcoming blockchain halving event, Spot Bitcoin ETFs have been a major factor driving BTC’s bullish momentum.
These investments have been the talk of the crypto market ever since they were approved in January. So, having a lucrative pick in your portfolio is a great way to take advantage of the chances presented by this popular asset class right now. Fortunately, ETFSwap ($ETFS) has introduced a decentralized method of investing in them without going through an intermediary.
What Are Spot Bitcoin ETFs?
Think of a traditional gold ETF and how it allows you to invest in gold without buying and storing the metal yourself physically. Spot Bitcoin ETFs also operate on a similar principle. These ETFs hold actual Bitcoin (BTC) in their reserves. So, when you invest in a Spot ETF, you are basically buying a share of a basket of these BTC.
The value of your ETF share is the real-time market price of Bitcoin. As BTC’s price fluctuates, so does the price of your ETF share. The ETF structure has several advantages, and unlike directly buying BTC, ETFs provide greater liquidity, making it easier to enter and exit the market.
It’s important to know the difference between Spot ETFs and Futures ETFs, which have already received approval from some regulatory bodies. Bitcoin Futures ETFs don’t directly hold BTC; instead, they track the price of Bitcoin (BTC) futures contracts. These futures contracts are agreements that obligate an investor to buy or sell Bitcoin (BTC) at a predetermined price on a future date. While both offer exposure to BTC, Spot ETFs provide a more direct link to the current price of BTC.
Direct Access With Leverage On ETFSwap ($ETFS)
Unlike some Bitcoin (BTC) investment products that use derivatives, ETFSwap’s Spot Bitcoin ETFs track the actual price of BTC. This gives a straightforward and transparent way to gain exposure to BTC’s price movements within the DeFi ecosystem.
ETFSwap ($ETFS) also takes things a step further by introducing leveraging into the mix. Leverage allows you to increase your potential returns (or losses) on your investment.
When using leverage, you basically borrow funds from the platform to increase the size of your investment. For example, with 5x leverage, a $1,000 investment would effectively control $5,000 worth of Bitcoin. If the price of BT increases, the leverage multiplies your gains.
The most exciting aspect of leverage is the possibility of magnified returns. With 10x leverage, a 10% increase in the price of Bitcoin translates to a 100% return on your investment. In our example, with a 10x leverage and a 10% rise in BTC’s price, your $1,000 investment would see a 100% return of $1,000 instead of $100. This is incredibly appealing for investors who want to increase their profits in a potentially high-growth market like Bitcoin.
Leverage also allows you to control a larger position in the market with a smaller initial investment. This is attractive for investors who want to increase their trading size in BTC without using a lot of capital.
ETFSwap ($ETFS) also makes provisions for investors with a low-risk tolerance. You can choose to invest in Spot Bitcoin ETFs without leverage, gaining direct exposure to BTC’s price movements. Alternatively, you can use leverage to potentially magnify your returns. But be aware of the magnified risk involved.
To take advantage of this feature on ETFSwap ($ETFS), you can start by participating in stage one of its presale. Each token currently costs $0.00854, and this price is expected to double in the second presale stage. Therefore, there is no better time to get into the ETFSwap ($ETFS) ecosystem than now!
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