Leveraged ETFs are quickly overtaking futures as the next widespread cryptocurrency asset trade. With leveraged ETFs, MEXC, the cryptocurrency exchange with the highest online futures trading liquidity, regains the top spot in the cryptocurrency market.
The top three platforms in terms of depth performance are MEXC, Binance, and Kucoin, according to a comparison of the leveraged ETF depth indicators of trading platforms like Binance, MEXC, Kucoin, Gate, and Huobi and an analysis of their leveraged ETF transactions of popular cryptocurrencies with the highest market caps. According to the data, MEXC is the leader in liquidity for BTC 3L, ETH 3L, LTC 3L, and EOS 3L trading depth.
Using BTC 3L as an example, the 1% depth on MEXC is 14,403,439 USDT, the 1% depth on Binance, which comes in second, is 87,359.56 USDT, and the 1% depth on Kucoin, which comes in third, is only 48,479.6 USDT. MEXC has surpassed the total of Binance and Kucoin at this level, and the difference is likely to grow.
It is also clear from a comparison of ETH, LTC, EOS, and other widely-used cryptocurrencies that MEXC’s leveraged ETF trading offers the best liquidity, while the depth of different trading platforms is significantly lower than MEXC. While MEXC’s 24-hour leveraged ETF trading volume was USD 9.25 million, accounting for a market share of 24.8% and placing second, Binance’s 24-hour leveraged ETF trading volume was USD 23.67 million, according to cryptorank data.
In November 2019, MEXC first introduced the leveraged ETF. This perpetual leveraged product, which aims to offer leveraged returns on the benchmarked perpetual futures, magnifies the price change of the benchmarked asset. It can be compared to an exchange-traded fund with multiple leverages.
Leveraged ETF products have the same straightforward trading regulations as spot products. There is no requirement to use all of the available margins to hold positions like futures. Some investors with a low-risk tolerance prefer it because it can generate considerable gains and returns simultaneously, much like futures.
Each token on MEXC currently supports 3x long (3L) and 3x short (3S) leveraged ETF trading and some popular cryptocurrencies also support 2x, 4x, or 5x leverage with manageable risk. For instance, all you need to do to go 3x long for bitcoin is to buy BTC3L/USDT; all you need to do to go 3x short for bitcoin is to buy BTC3S/USDT; all you need to do to close the position is to sell the corresponding position. There is no need to be concerned about the risk of liquidation because leveraged ETFs do not use margins to hold positions and do not have liquidation rules.
There is a rebalancing mechanism for leveraged ETFs, and the impact of compound interest is clear. The daily profit will automatically be transferred to the position and reinvested to realize the compound interest in a continuously rising/falling market. The profit will be higher than the margin or futures products of the exact multiple. More than 300 cryptocurrencies, including BTC, ETH, DOT, ATOM, SHIB, DOGE, AAVE, CRV, etc., are currently supported by MEXC for trading with leveraged ETFs. It offers more cryptocurrencies than any other source on the Internet, giving users more options for trading in various market conditions.