Best Leveraged Tokens Crypto Trading Sites from Bybit Learn compare spot, leveraged tokens and derivatives

Leveraged Tokens List from Binance, Bybit, Kucoin, MEXC, OKX

We list the best Leveraged Tokens crypto trading sites in this article.

Leveraged Tokens involve risk and are not suitable for long-term investments. 

List: Best Leveraged Token Crypto Trading Sites

  • Kucoin has the 2nd most listed leveraged tokens with 29 cryptocurrencies in both directions
  • Bybit has few listed leveraged tokens but the 2nd lowest management fees after Binance.
  • Gate.io has the most listed leveraged tokens markets and the highest leverage. Also, they have the lowest fees for very short trades since they don’t charge any trading fees for opening and closing a trade.
  • Binance has the lowest management fees and adjustable leverage.
  • BYDFi is one of the best crypto trading sites still accepting traders from the USA.

Bonus: See all free crypto sign-up bonuses 2024 with terms and conditions.

What are Leveraged Tokens?

➤Crypto leveraged tokens are a crypto trading instrument that gives traders a leveraged position in trading. Many experience this way as a simplified version of crypto leverage trading.

Best Leveraged Tokens Crypto Trading Sites from Bybit Learn compare spot, leveraged tokens and derivatives

The above images are taken from Bybit Learn, which offers some of the best free crypto trading courses and educational material. Here, you can see how Leveraged Tokens are an intermediary between the spot and derivative markets.

In contrast to many other leveraged positions in crypto trading, leveraged tokens don’t need margin and can’t be liquidated. However, they still involve risks, and you might want to read more about crypto trading risk management.

Crypto Leveraged Tokens Trading Methods

There are usually two different trading methods connected to leveraged tokens.

  1. Buy and Sell ins the spot market – You can trade the leveraged tokens in the spot market. We and the exchanges recommend this.
  2. Purchase and Redemption – The exchanges process subscription and redemption requests each day. However, these are often limited in number per day.

Crypto Leveraged Tokens VS Derivative Trading

Leveraged Tokens summary

  • Rebalancing – Rebalance is a process where leveraged tokens increase or decrease their futures positions in the underlying asset to achieve the target leverage. As the price of its underlying asset goes up, it will take on more positions. Likewise, if prices go down, it will reduce positions.
  • No margin required
  • No liquidation risk – Note: The net asset value of a Leveraged Token could still fall to zero, in which case it would be unrecoverable.
Derivative trading summary

Crypto Leveraged Tokens Risks

Leveraged tokens are only fit for professional investors to use for risk hedging or short-term one-sided market investment.

They are not suitable for medium and long-term investments. Because of the position adjustment mechanism, the risk of holding leveraged tokens for a long time is extremely high. The longer the holding time, the greater the volatility and friction costs.

Leveraged Tokens Calculation Example

Suppose the spot price of BTCUSDT rises from $10,000 to $10,500 in one day, a 5% increase.

• If you’ve bought the BTC3L (long with 3x leverage) Leveraged Token, you’ll have a 15% return.

• If you’ve bought the BTC3S (short with 3x leverage) Leveraged Token, you’ll incur a 15% loss. Read more about how to short Bitcoin on Binance.

With the correct prediction of the underlying token’s price movements under suitable market conditions, you can significantly magnify yield compared to a spot trading position.

Kucoin Leveraged Tokens – 3x

Kucoin is one of the best crypto trading leverage platforms with great possibilities for high returns. 

The leveraged tokens can go long and short in the underlying cryptocurrency and will move 3x the spot market in any direction.

The great benefits of leveraged tokens are

  • No collateral or margin maintenance is required to hold leveraged tokens
  • There are no liquidation risks

Note that leveraged tokens may experience high price volatility, and the risk is still high even without liquidation risk.

Read more about the Kucoin exchange.

Kucoin Leveraged Token Trading Fees

1. Trading Fees: For buying or selling at the spot market. Starts at 0.1% but can be lower.

2. Subscription Fees/Redemption fees: Subscription and redemption fees are charged when users subscribe and redeem tokens. Currently, the fee rate is 0.1% per subscription/redemption.

4. Management Fees: Management fees are charged at 0.045% by 23:45 (UTC) daily. The fee will be incorporated into the net asset value of the Leveraged Tokens.

 The management fee of ADA3L and VET3L is 0.1% due to the large fluctuations in the recent market.

Kucoin Leveraged Token List

ALGO, ETH, PEPE, ADA, BCH, SOL, APT, BLUR, ARB, FLOKI, SUI, FTM, JASMY, DNDR, BTC, EOS, VET, XRP, DOGE, BNB, LINK, MATIC, DOT, UNI, AXS, NEAR, SUSHI, SAND, AVAX, GALA, GMT, OP, SHIB, GRT, ID, CFX, ARB, SXP, MASK, STX, LINA, INJ, ETC, CTSI, ICP. KAVA, LUNC, CIL, WOO, FIL

Bybit Leveraged Tokens Pros and Cons

Pros

  • Easy to get leveraged exposure with no risk of liquidation
  • No margin is necessary
  • Kucoin has many listed leveraged tokens

Cons

  • Very high management fee

You pay either trading or S/R (subscription/redemption) fees. Note that the management fee will hava a serious impact on your total holdings if you hold the position for more than a few days.

Bybit Low Management Fees – Leveraged Tokens

Bybit Leveraged Token represents a basket of perpetual contract positions. When you trade a Leveraged Token, you invest in a basket of contracts for the underlying asset. This is similar to all other exchanges as well.

Like other trading sites, a Leveraged Token is a crypto derivative product with no margin or liquidation risks. It provides you with leveraged exposure to the underlying asset. It is suitable for short-term investments in a one-sided market since, in a volatile market, your position will decrease due to the management fees.

Bybit Leveraged Tokens Trading Fees

The fees involved with Bybit Leveraged Tokens are as follows:

  1. Trading Fees: Charged when buying/selling the leveraged tokens on the spot market. The fee level is the same as that of spot trading and starts at 0.1% but can be lower.
  2. Subscription Fee/Redemption Fee: Charged when subscribing/redeeming a leveraged token. The fee is currently 0.1% of each subscription/redemption.
  3. Management Fee: The management fee of 0.02% will be charged daily at 12 AM (midnight) UTC. It will be reflected in the net asset value of the Leveraged Token.

Bybit Leveraged Tokens List

ADA, APE, ATOM, AVAX, BTC, DOGE, DOT, EOS, ETC, ETH, FTM, GMT, LINK, LTC, MATIC, SAND, XRP

Bybit Leveraged Tokens Pros and Cons

Pros

  • Low management fee 

Cons

  • Bybit has a few listed leveraged tokens

You pay either trading or S/R (subscription/redemption) fees. Note that the management fee will hava a serious impact on your total holdings if you hold the position for more than a few days.

Gate io Lowest Trading Fees – Leveraged Tokens

Gate.io Leveraged Tokens are a derivative that provides leveraged exposure to the underlying asset.

Leveraged tokens can be traded on the spot market but will move according to their leverage 3x-5x the spot market. Like other trading sites, each leveraged ticket represents a basket of perpetual contract positions.

The price of a leveraged token moves along with price changes in the perpetual contract market, and the leverage level moves up and down accordingly. Investing in them requires knowing this product’s benefits and possible risks.

Gate.io Leveraged Tokens Trading Fees

Gate.io’s leveraged tokens come with a daily management fee of 0.1%. The daily management fee includes all costs incurred by trading leveraged tokens, including handling fees of contract trades, funding fees, and frictional expenses due to price differences when opening positions. This differs from the other exchanges since the everyday praxis is to charge trading fees for buying and selling a leveraged token.

Gate.io Leveraged Tokens List

ETH, FIL, LINK, AXS, DOGE, LTC, XRP, YFI, XEC, BTC, COTI, APE, UNI, RUNE, SHIB, DOT, ROSE, ENJ, GALA, ETC, SUSHI, EOS, FTT, CHZ, AAVE, SLP, MASK, BCH, KSM, HT, WAVES, FITFI, BAL, ALGO, NEAR, BSV, XTZ, GST, JASMY, DASH, GLMR, HT3, BSW, LRC, MANA, LIT, AR, APT, ANC, 1INCH, SNX, YFI, COMP, CRV, RACA, SKL, EGLD, MKR, XMR  and more…

Gate.io Leveraged Tokens Pros and Cons

Pros

  • It is easy to get leveraged exposure with no risk of liquidation
  • No margin is necessary
  • Kucoin has many listed 

Cons

  • Very high management fee

You pay either trading or S/R (subscription/redemption) fees. Note that the management fee will hava a serious impact on your total holdings if you hold the position for more than a few days.

Binance Leveraged Tokens

Binance Leverage Tokens (BLVTs) differ from conventional leveraged tokens (LT). Instead of maintaining constant leverage, BLVTs carry a variable target leverage range between 1.5x and 3x. 

Leveraged tokens are tradable in the Binance Spot Advanced trading interface and track the underlying perpetual contracts on Binance Futures. 

BTCUP allows you to generate leveraged gains between 1.5 to 3x when Bitcoin goes up and vice versa with BTCDOWN.

Read more about Binance margin trading.

Binance Leveraged Tokens Trading Fees

The fees associated with Binance Leveraged Tokens are as follow:
Trading Fees: Trading fees are charged when buying or selling tokens in the spot market, and the fee schedule is identical to spot trading;
Subscription Fees/Redemption Fees: Subscription and redemption fees are charged when users choose to subscribe or redeem to tokens. These are currently set at 0.1% per subscription/redemption.
Management Fees: A daily management fee of 0.01% will be charged at 00:00 UTC and reflected directly in the net asset value of the Leveraged Tokens;
Funding Fees: Funding fees are paid (or paid to) the underlying fund based on the funding rate and reflected directly in the net asset value of the Leveraged Tokens. Binance takes no fees for funding rate transfers, now between traders.

Binance Leveraged Tokens

ADA, BNB, BTC, ETH, 1INCH, BCH, DOT, EOS, FIL, LINK, LTC, SUSHI, SXP, TRX, UNI, XLM, XRP, XTZ, YFI

Binance Leveraged Tokens Pros and Cons

Pros

  • Binance has Variable leverage vs Fixed Leverage (as most other exchanges have)
  • Rebalancing
  • Market Liquidity
  • Transaction and Related Fees

Cons

  • Lower leverage than the other trading sites

You pay either trading or S/R (subscription/redemption) fees. Note that the management fee will hava a serious impact on your total holdings if you hold the position for more than a few days.

Bydfi crypto exchange logo

BYDFi Leveraged Tokens

BYDFi is a one-stop social trading platform for individual investors. BYDFi has been offering professional, convenient, and innovative trading solutions to global users since 2020, including spot trading, lite contracts, perpetual contracts, and copy trading.

 

BYDFi Leveraged Tokens trading fee:
The transaction fee for leveraged tokens is charged separately when buying or selling (USDT), and the transaction fee rate is 0.2%.

Management Fee:

The management fee is charged daily at 00:00:00 (UTC+8) and will be reflected in the net asset value of the leveraged tokens, which means 0.03% of the true value of the leveraged tokens will be deducted and no deduction will be made to users’ current positions. No management fee will be charged if users do not hold any leveraged tokens at that point.

BYDFi Leveraged Tokens List

Allt he below-listed currencies are available as 3xLong and 3x Short as you can see in the BTC example.

BTC3xLong, BTC3xShort, ETH, ETH, XRP, DOT, LINK, AAVE, ADA, ALGO, ATOM, AVAX, AXS, BCH, BNB, DOGE, EOS, FIL, FLOKI, FTM, GALA, HBAR, JASMY, ETC, LUNA, MATIC, NEAR, QNT, SHIB, SKL, SOL, TRX, UNI, XLM

You pay either trading or S/R (subscription/redemption) fees. Note that the management fee will hava a serious impact on your total holdings if you hold the position for more than a few days.

OKX Leveraged Tokens

Token leverage trading is buying or selling tokens with borrowed money. You can make more money by trading between tokens, but you can also lose more.

You can borrow tokens from OKX and trade with 3 times your money. You can also sell tokens you don’t have and buy them back later to make money.

To start token leverage trading, you need to:

Move money from your “spot account” to “margin account” Borrow tokens Trade First, login to OKX and go to Tokens Trading. You will see a pop-up window of the rules for leverage trading. Please read and agree to them before you trade.

MEXC Leveraged Tokens

MEXC leverage tokens are an exchange-traded fund (ETF) that allows traders to amplify their exposure to the price movements of various crypto assets, such as Bitcoin, Ethereum, or Luna, without having to manage margin or liquidation risk.

Leveraged Crypto ETFs are securities that use debt and derivatives to boost the returns of a crypto asset, such as Bitcoin or Ethereum. They can have a 2:1 or 3:1 ratio, meaning that a 1% change in the crypto price can result in a 2% or 3% change in the ETF price.

Leveraged ETFs are perpetual, meaning that they have no expiration date and no liquidation risk. They are traded in USDT on the spot market, and investors can buy or sell them at any time without margin. They are adjusted by the fund managers to maintain the target leverage when the crypto price changes.

Leveraged ETFs allow investors to profit from the crypto market with a higher exposure and lower risk. MEXC offers 3x long and short leveraged ETFs, which can be accessed from the “Market” tab and then “ETF”.

About Leveraged Tokens

Leveraged tokens are a type of cryptocurrency investment instrument that has gained popularity in recent years, particularly in the context of decentralized finance (DeFi). These tokens are designed to amplify the price movements of an underlying asset, usually by a certain multiple, allowing investors to potentially generate higher profits or losses compared to holding the asset directly. In this article, we will delve into the mechanics, advantages, disadvantages, and considerations surrounding leveraged tokens in the crypto market.

Understanding Leveraged Tokens

Leveraged tokens are typically issued and managed by centralized or decentralized platforms. These tokens aim to provide leveraged exposure to the price movements of a specific cryptocurrency or asset, such as Bitcoin (BTC) or Ethereum (ETH). The leverage is achieved through financial engineering, typically involving the use of derivatives and rebalancing mechanisms.

When an investor buys a leveraged token, they essentially gain exposure to a leveraged position in the underlying asset without the need to directly manage margin accounts or derivative contracts. These tokens come in various leverage levels, such as 2x, 3x, or more, indicating how much the token’s price should move for every percentage point move in the price of the underlying asset.

For example, a 2x leveraged token will aim to move up or down by 2% for every 1% price movement in the underlying asset. If Bitcoin increases by 5%, a 2x leveraged Bitcoin token should ideally increase by 10%.

Mechanism Behind Leveraged Tokens

The mechanism of leveraged tokens involves a continuous rebalancing process to maintain the desired leverage level. This is necessary due to the volatile nature of cryptocurrencies and their price fluctuations. To achieve the target leverage, the issuer rebalances the token’s holdings periodically, usually daily.

When the price of the underlying asset goes in the direction that favors the leverage, the issuer will adjust the token’s holdings to maintain the target leverage. For instance, if the price of the underlying asset increases for a 2x leveraged token, the issuer will sell some of the asset to rebalance and maintain the 2x leverage. Conversely, if the price decreases, they will buy more of the asset.

This rebalancing process helps prevent the token’s leverage from deviating significantly from the target, ensuring that it maintains its leveraged exposure over time.

Advantages of Leveraged Tokens

  1. Easy Access to Leverage: Leveraged tokens offer an easy and convenient way for investors to access leverage without the complexity of managing margin positions and derivative contracts.

  2. Diversification: Investors can diversify their portfolios by gaining leveraged exposure to multiple assets simultaneously without the need for separate margin accounts for each asset.

  3. Risk Management: The daily rebalancing mechanism helps manage risk by ensuring that the token’s leverage is maintained close to the target, minimizing the risk of liquidation or extreme losses.

  4. Liquidity and Accessibility: Leveraged tokens are often listed on major cryptocurrency exchanges, providing liquidity and accessibility to a wide range of traders and investors.

Disadvantages of Leveraged Tokens

  1. Price Decay: Due to the rebalancing process, leveraged tokens can experience price decay over time, leading to a reduction in the token’s value even if the underlying asset’s price remains unchanged.

  2. Increased Volatility: Leveraged tokens can exhibit increased volatility compared to the underlying asset, which can result in significant gains or losses in a short period.

  3. Not Suitable for Long-Term Holding: Leveraged tokens are designed for short-term trading or hedging rather than long-term holding. Holding leveraged tokens over extended periods can result in diminished returns due to the rebalancing process.

  4. Complexity and Understanding: The financial engineering and rebalancing mechanisms involved in leveraged tokens can be complex and may require a good understanding of both the underlying asset and the token’s mechanics.

Considerations for Investors

  1. Understanding Leverage: Investors should have a clear understanding of how leverage works and its associated risks. High leverage can magnify gains, but it can also lead to substantial losses.

  2. Risk Management: It’s crucial to implement effective risk management strategies, such as setting stop-loss levels, to protect against potential losses when trading leveraged tokens.

  3. Short-Term Strategy: Leveraged tokens are best suited for short-term trading due to their rebalancing mechanisms. Long-term holding can lead to unexpected outcomes due to the compounding effects of daily rebalancing.

  4. Regular Monitoring: Investors should regularly monitor the performance of leveraged tokens and be aware of any changes in their leverage levels and the underlying assets.

In conclusion, leveraged tokens provide a means for traders and investors to potentially amplify their exposure to cryptocurrency price movements without directly managing complex leveraged positions. However, it’s essential to understand the risks involved and use leverage judiciously to avoid significant losses. As with any financial instrument, thorough research and a clear understanding of the mechanics are crucial before investing in leveraged tokens.

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