Crypto Traders Balance Risk and Safety as Volumes Soar
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A growing number of investors in the United States are turning to cryptocurrency-based financial products to navigate heightened market uncertainty brought on by shifting trade policies. Recent data shows a surge in demand for both leveraged exchange-traded funds (ETFs) and crypto derivatives, as US President Donald Trump’s tariff plans inject new volatility into global markets. While some traders are seeking amplified exposure to risk assets like Bitcoin, others are hedging defensively with gold and cash. Traders Bet Both Ways as Volatility Reigns: Record Flows to Leveraged Long and Safe-Haven ETFs in 2025 Traders are simultaneously chasing high-risk rewards and sheltering in low-risk sanctuaries—often within the same trading day. According to newly released data from Bloomberg Intelligence, exchange-traded funds (ETFs) at both extremes of the risk spectrum are seeing record-breaking inflows, suggesting a bifurcated strategy among investors navigating what may be one of the most unpredictable markets in modern history. So far this year, ETFs that offer leveraged long exposure—typically amplifying the daily returns of volatile assets like tech stocks and cryptocurrencies—have attracted around $6 billion in net inflows. At the same time, cash and gold ETFs have collectively drawn approximately $4 billion, signaling a defensive posture among a significant segment of the investor base. “There’s basically record flows going into leveraged long ETFs but also cash and gold ETFs as people buy the dip and hedge the dip at the same time,” noted Bloomberg Intelligence senior ETF analyst Eric Balchunas in an April 23 post on X. “May the best degen win!” This strange duality reflects a market deeply divided—where some investors are betting on sharp rebounds while others brace for further corrections. Leveraged ETFs, often branded with 2x or 3x multipliers, are inherently speculative and popular among day traders and hedge funds. On the opposite end, gold and cash…
Filed under: News - @ April 24, 2025 10:24 am