Gate ETF Token: The "Amplifier" for Maximizing Returns in Trends

In a sustained bullish trend, Bitcoin’s price has increased by 20%. Users holding BTC3L (Bitcoin 3x Long Leverage Token) do not see their net asset value grow simply by 60%. Due to the positive compounding effect, actual returns could be even higher. Behind this is Gate ETF’s leverage tokens acting as “trend amplifiers” through their core mechanism.

01 Gate’s ETF Product Ecosystem

The Gate platform offers a diversified range of ETF-related products to meet the needs of investors with different risk preferences and return objectives. Its product ecosystem is primarily built around two core components: leverage tokens designed to amplify short-term trend gains, and high-yield strategy ETFs seeking steady cash returns.

Leverage tokens, such as BTC3L or ETH3S, are spot trading instruments that require no margin and carry no forced liquidation risk. Their underlying positions are automatically managed via smart contracts that hold perpetual contracts, aiming to magnify the daily price movements of the underlying asset by 2x, 3x, or even 5x.

Another category is high-yield strategy ETFs. For example, Gate’s selected high-yield strategy ETF invests in a basket of DeFi and mining projects to generate returns. These two sectors account for a combined proportion of up to 56% in the portfolio, and the staking and mining income alone can potentially contribute significant annualized yields per ETF share.

02 Leverage Tokens: The Yield Engine in Trend Markets

The core advantage of leverage tokens lies in their unique “automatic rebalancing” mechanism. The system automatically adjusts the underlying contract positions at a fixed time each day (UTC+8 midnight) or when certain conditions are met, bringing the token’s leverage back to its target value (e.g., 3x).

This means that in clear one-sided trends, profits are automatically used to increase positions, achieving a “compound interest” effect; while in declining markets, positions are automatically reduced to control risk exposure, avoiding sudden liquidations like traditional futures trading.

However, this mechanism is a double-edged sword. In continuous upward or downward trending markets, it can generate excess returns beyond simple leverage multiples. Conversely, in choppy, sideways markets without a clear direction, frequent rebalancing can lead to “volatility decay,” and even if the underlying asset’s price returns to the starting point, the net asset value of the leverage token may be below the initial level.

Therefore, the positioning of these products is very clear: they are powerful short-term trend trading tools, not long-term holdings.

03 Selection and Timing: Strategy Application for Different Leverage Multiples

Choosing which leverage multiple to use essentially involves balancing return potential and risk control. The table below compares the core features and suitable scenarios for different leverage products:

(Information compiled from Gate official documentation and strategy guides)

The key is to judge the entry timing. The ideal environment for trading leverage tokens is at the early stage of a trend. Technical signals such as突破关键阻力位 (breaking key resistance levels), moving average bullish alignment, and significantly increased trading volume can serve as entry references. Additionally, setting a clear stop-loss (e.g., 2%-5% below entry price) is vital—this is the lifeline of leveraged trading.

04 Yield Strategies: High Dividends and Flexible Participation

For investors seeking stable cash flow rather than short-term price fluctuations, Gate’s high-yield strategy ETFs offer an alternative. These products carefully select high-yield DeFi and mining projects to build a portfolio capable of generating continuous cash flow, which is then distributed as dividends to holders.

The advantage of this strategy is its “predictability” of returns. For example, the ETF tracks a “Selected High-Yield Index” that adopts a pragmatic approach, using the “published yield” of projects as a core screening criterion, and reviews holdings at fixed times each year to ensure inclusion of assets that are genuinely generating high yields.

Even investors with limited capital can participate through fractional ETF trading. Gate supports purchasing fractional ETF shares, significantly lowering the investment threshold. Holding fractional shares also entitles investors to proportional dividends, making it an effective way for long-term wealth accumulation.

05 Building a Maximize-Yield Comprehensive Strategy

Maximizing returns is not simply about fully allocating to high-leverage tokens. Mature traders build a balanced, comprehensive strategy that combines offense and defense.

The core principle is strict position control. For high-risk tools like leverage tokens, individual investments should not exceed 2%-5% of total capital. This ensures that even maximum expected losses on a single trade won’t severely damage the account.

Portfolio diversification is crucial. Most funds can be allocated to spot holdings or low-leverage index funds as the “mainstay.” Meanwhile, a small portion can be used to operate high-leverage tokens in clear short-term trend scenarios, serving as the “offensive spear.” During heightened market volatility, inverse leverage tokens (e.g., short positions) can also be used to hedge spot holdings.

Finally, all strategies must be based on a clear understanding of costs. Gate ETF leverage tokens charge a daily management fee of 0.1% to cover underlying contract fees and funding costs. Holding for too long without sufficient profit can lead to fee erosion that eats into the principal.

Future Outlook

When Bitcoin’s price surges another 10%, those holding spot will realize the basic gains, while investors with BTC3L will experience a steeper net asset growth curve.

The net value of leverage tokens continuously rebalances upward in trending markets, with each rebalancing act adding fuel to the yield engine. For traders who can identify trends and strictly follow risk management rules, this forms an efficient system for capturing market momentum.