First Leveraged Ether ETFs Hit US Market

REX Shares, in partnership with Tuttle Capital Management, launched the first leveraged and inverse Ether ETFs on Thursday, expanding the rapidly evolving cryptocurrency ETF landscape.

The new ETFs provide traders with leveraged exposure to Ether through regulated investment products for the first time, building on the Securities and Exchange Commission’s recent approval of spot Ethereum ETFs, according to REX Financial CEO Greg King in the company’s announcement.

The T-REX 2X Long Ether Daily Target ETF (ETU) and the T-REX 2X Inverse Ether Daily Target ETF (ETQ) offer investors 200% leveraged and inverse exposure to Ether's daily performance through swaps based on recently launched spot Ethereum ETFs, according to the release.

Spot Ethereum ETFs track Ether, the token of the Ethereum smart contracts blockchain and second-largest cryptocurrency with a market capitalization of $301 billion.

REX Shares Launches Leveraged, Inverse Ether ETFs

The new ETFs will use swap agreements with major financial institutions to achieve their leveraged exposure, with returns based on the performance of recently launched spot Ethereum ETFs like BlackRock’s iShares Ethereum Trust (ETHA) and Grayscale Ethereum Trust (ETHE), according to the fund's prospectus.

Initially, the funds expect to primarily use swaps tracking ETHA to achieve their exposure, the prospectus states. Both funds rebalance daily, with ETU doubling gains or losses and ETQ moving in the opposite direction at twice the magnitude.

The launch follows REX’s earlier crypto offerings, including the T-REX 2X Long Bitcoin Daily Target ETF (BTCL) and T-REX 2X Inverse Bitcoin Daily Target ETF (BTCZ), which launched in July. Those funds have gathered $13 million and $2.3 million in assets, respectively, since their debut, according to etf.com fund flows data.

Ethereum ETF flows have been mixed since their launch in July. while ETHA has gathered $1.2 billion in inflows, while ETHE has experienced $3 billion in outflows year-to-date, the largest among spot Ethereum ETFs, according to U.K.-based asset manager Farside Investors. ETHE differs from the other ETFs in the category because it is a conversion from a closed fund and carries the highest expense ratio of 1.5%.