When you see the chart of SXPBULL, you may see that it came down from several hundreds of thousands USD to 4 USD, losing its 99% of value. You may think when SXP increases, it may recover and see its ATH again. But it doesn't seem to be the case. SXPBULL is too fragile against dumps.
When you compare SXPUSDT together with leveraged tokens SXPUP (Binance) and SXPBULL (FTX), you will see that leveraged tokens are not good for the long term, but good just for the short term pumps. SXP performed much better than SXPUP and SXPBULL. Over the course of the first 5.5 months of 2021, SXP did 454% whereas SXPUP did 243% and SXPBULL lost 77% of its value.
We see that Binance's leveraged token SXPUP performs much better than SXPBULL, probably due to the variations in their strategies. SXPBULL is a 3X leveraged token which reinvests the earned amount. When the market goes down, it decreases several folds. For it to increase sharply, you have to see several (6+) consecutive green bars so that it can recover from the most recent dump. However SXPUP uses an adjusted leverage. When the market goes down, it reduces the leverage ratio so that you lose less.
I think SXPUP provides lower risk-lower reward due to its automatic leverage adjustment depending on the market conditions. However in a market that is frequently dumped and pumped like this season, SXPBULL loses momentum and goes to the dip whereas SXPUP can tolerate these dumps and manage to provide good profit (though less than SXP).
When you compare SXPUSDT together with leveraged tokens SXPUP (Binance) and SXPBULL (FTX), you will see that leveraged tokens are not good for the long term, but good just for the short term pumps. SXP performed much better than SXPUP and SXPBULL. Over the course of the first 5.5 months of 2021, SXP did 454% whereas SXPUP did 243% and SXPBULL lost 77% of its value.
We see that Binance's leveraged token SXPUP performs much better than SXPBULL, probably due to the variations in their strategies. SXPBULL is a 3X leveraged token which reinvests the earned amount. When the market goes down, it decreases several folds. For it to increase sharply, you have to see several (6+) consecutive green bars so that it can recover from the most recent dump. However SXPUP uses an adjusted leverage. When the market goes down, it reduces the leverage ratio so that you lose less.
I think SXPUP provides lower risk-lower reward due to its automatic leverage adjustment depending on the market conditions. However in a market that is frequently dumped and pumped like this season, SXPBULL loses momentum and goes to the dip whereas SXPUP can tolerate these dumps and manage to provide good profit (though less than SXP).
Comment:
Not an investment advice.