The cryptocurrency investment landscape has expanded significantly with the introduction of options on leveraged bitcoin exchange-traded funds (ETFs). This development marks a groundbreaking moment for the ETF industry as investors now have the ability to trade options on products tracking bitcoin's spot price through derivative swaps.
Rex Shares and Tuttle, the firms behind the newly launched T-Rex 2x Long Bitcoin Daily Target ETF and the T-Rex 2x Inverse Bitcoin Daily Target ETF, announced the commencement of options trading on these leveraged products on Thursday. These ETFs are specifically designed for traders seeking amplified returns or those betting on a bitcoin price decline.
It is crucial to note that while options on these swap-based bitcoin ETFs are now accessible, the Securities and Exchange Commission (SEC) has yet to approve options for the nine spot bitcoin ETFs introduced earlier this year.
The underlying asset for these leveraged ETFs is BlackRock's iShares Bitcoin Trust, the industry-leading bitcoin ETF. However, it is essential for investors to understand that leverage can magnify both gains and losses, potentially increasing volatility.
Both Rex Shares and Tuttle have emphasized the importance of thorough research and understanding the unique risks associated with trading options on these specialized ETFs.