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Bitrue ETF Introduction

  • Updated

1. What are Bitrue ETFs

Bitrue ETF is a type of financial product offering leveraged exposure to the price movements of underlying assets. It provides a simplified way to trade with leverage, eliminating the need for collateralized assets or concerns about liquidation.

Naming Convention

Each ETF ticker consists of underlying asset + leverage multiple + direction suffix:

  • L = Long (bullish exposure)
  • S = Short (bearish exposure)

Examples:

  • XRP3L: 3‑times daily long exposure to XRP. If XRP rises 1%, XRP3L’s net value increases by 3%.
  • XRP3S: 3‑times daily short exposure to XRP. If XRP drops 1%, XRP3S’s net value increases by 3%.
  • XRP1S: 1‑times daily short exposure to XRP. If XRP drops 1%, XRP1S’s net value increases by 1%.

2. Core Terminology & Calculation Formulas

Basket Position: The quantity of underlying assets held by the ETF.
Basket Loan: The amount of borrowed currency associated with the ETF.
Net Value: The ETF’s value, calculated as:
Net Value = (Basket Position x Underlying Asset Price) + Basket Loan
 
Example Calculation:
For XRP3L:
  • Basket position = 3 XRP
  • Underlying asset price = 100 USDT
  • Basket loan = -200 USDT
Then:
Net Value = (3 x 100) - 200 = 100 USDT
 

3. ETF Position Adjustments

3.1 Regular Position Adjustment

To maintain the target leverage, ETFs undergo daily rebalancing, ensuring the leverage resets to the agreed multiple at the start of each trading day.
 

3.2 Specific Position Adjustment

If an ETF’s actual leverage deviates significantly during the day, the platform will perform a temporary adjustment to restore the agreed leverage multiple.
 
 

4. Prerequisites for ETF Trading

Before you start trading ETFs on Bitrue, you must ensure that your account is fully verified. This is a mandatory step due to regulatory requirements and will also enable you to access all platform features.

How to Begin the KYC Process:

  1. Registration: After successfully registering on Bitrue, log into your account.
  2. Go to the KYC Section: Navigate to the “Verification” section of your profile.
  3. Level 1 Verification:
    1. Fill in your personal information.
    2. Verify your mobile number.
    3. Submit the details to complete Level 1 verification.
  4. Level 2 Verification:
    1. Select the type of ID document you wish to upload (passport, driver’s license, etc.).
    2. Fill in the document number and upload a clear picture of your document.
    3. Submit the details for verification.
 
Once both levels are complete, your account will be fully verified and ready to use for ETF trading.
 
 

5. Trading Guidelines

5.1 How to Trade ETFs on Bitrue

 

Guide for Web (PC Browser)

  1. Access the ETF Trading Interface: Go to the "Trade" tab or visit the ETF Trading Interface directly.
  2. Select an ETF: Browse the list of leveraged ETFs to pick one you want to trade, or directly search for specific tokens such as XRP3L.
  3. Place Your ETF Order:
    1. Enter the Price at which you want to buy.
    2. Enter the quantity of the ETF you wish to purchase and confirm the order.

  4. Access Your ETF Holdings: Go to your "Assets" section to view the ETFs you currently hold.

 

Guide for Bitrue App (Mobile)

  1. Access the ETF Trading Interface: tap on the "Market" tab at the bottom, then switch the tab to "ETF" to view the available ETFs or search directly for specific tokens such as XRP3L.
     
  2. Place Your ETF Order:
    1. Enter the Price at which you want to buy.
    2. Enter the quantity of the ETF you wish to purchase and confirm the order.
    3. Click the Buy button to submit your order.
     
  3. Access Your ETF Holdings: Go to your "Assets" section to view the ETFs you currently hold.

 

5.2 Identity Authentication

Due to local regulations, some users may face restrictions on ETF trading. For details, refer to the latest policies on our website.
 

5.3 Holding Limits

Users must ensure their total holdings (current + new purchases) do not exceed the maximum allowable limit.
 

5.4 The Relationship Between Order Price and Net Value

The net value of an ETF is a key factor that affects both buying and selling prices. Here's how they are related:
  • Net Value Calculation: The net value is calculated as follows:
  • Net Value = (Basket Position x Underlying Asset Price) + Basket Loan
 
Order Price Limits: When placing an order, ensure that:
  • Buy Orders: Do not exceed 105% of the current net value.
  • Sell Orders: Do not fall below 95% of the current net value.
 
Understanding these relationships helps you manage your trading strategy more effectively.


 

7. Risk Reminder

Trading ETFs involves significant risks, including:
  • Net value reduction to zero.
  • Market volatility and slippage.
  • High fees and rebalancing algorithm front-running.
  • Platform delisting under extreme conditions.
Always trade responsibly and ensure you understand the risks before participating in ETF trading.
 
 

8. Other Common Questions

What Is the Leverage of ETFs?

Leverage refers to the ratio by which your ETF amplifies the price movement of the underlying asset. For instance:
  • XRP3L is a 3x long position on XRP, meaning if XRP increases by 1%, the ETF's net value increases by 3%.
  • XRP3S is a 3x short position on XRP, meaning if XRP decreases by 1%, the ETF’s net value increases by 3%.
 

Can I Adjust My Position?

Yes, ETFs undergo daily rebalancing to ensure they maintain their target leverage. However, if the market causes significant changes, Bitrue will perform temporary position adjustments to restore leverage.
 

Are There Any Risks Involved?

Yes, trading ETFs carries risks such as:
  • Market Volatility: ETFs can experience large price swings due to underlying asset movements.
  • Net Value Decline: The net value of your ETF could decrease, and in extreme cases, reach zero.
  • Rebalancing Costs: High management fees and rebalancing costs could impact your returns.
  • Market Slippage: The price at execution may vary from the expected order price due to market conditions.
Always trade responsibly and be aware of the risks involved in leveraged trading.
 

Conclusion

 

Trading ETFs on Bitrue provides you with a powerful tool to gain leveraged exposure to different assets. However, it is important to understand the mechanisms, risks, and how to place buy/sell orders effectively. Always verify your account, keep track of net values, and stay informed of market changes to optimize your trading strategy.
 
For more information or support, feel free to contact Bitrue's customer service.
 
Happy trading!

 

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