Retail traders pile into leveraged ETFs, pushing assets to record $100 B
The post Retail traders pile into leveraged ETFs, pushing assets to record $100 B appeared on BitcoinEthereumNews.com.
Retail traders are driving up the leveraged ETF boom, which has pushed asset weights to a new record of $100 billion. The market risks from AI and crypto have not stopped these traders from continuing to pile into leveraged funds to make trading gains in stocks such as Microsoft, Tesla, and semiconductor companies. Retail traders drive surge in leveraged tech and crypto ETFs As of last week, assets in long equity leveraged ETFs stood at about $95 billion. These funds, designed to magnify stock movements by two or three times, have outpaced their bearish counterparts, which collectively hold just $9 billion. Athanasios Psarofagis, an ETF analyst, said the market is extremely attractive for ‘degen traders’ as ETF investors see the nearly euphoric sentiment, a constant ‘buy the dip’ approach and a record number of leveraged products. These traders generally pursue high-risk and leveraged investments. The leveraged ETFs that focus on technology have been particularly positive. The MSFU and SOXL from Direxion Daily have both seen back-to-back weeks of inflows. The TSLL also saw its net asset growth over the past ten weeks, which hasn’t been seen since 2023. The link between cryptocurrency and ETFs has also witnessed a strong rebound in retail participation. The 2X Ether ETF (ETHU) saw its highest weekly inflows after a drop in the price of Ether. The fund’s retail trading was triggered by a social media promotion from Eric Trump, and the fund saw the highest cash inflows to date. Analysts raise concerns over leveraged ETFs amid rising speculation There are concerns about the sustainability of leveraged ETFs. These funds are usually meant for short-term traders because high-frequency trading products can result in substantial tracking errors over extended periods. Therefore, some individuals may be using these products the wrong way and lose a lot of…
Filed under: News - @ February 11, 2025 1:18 am