On July 10, investment managers REX Shares and Tuttle Capital Management launched two new exchange-traded funds (ETFs) that enable high-conviction Bitcoin ( BTC ) traders to double down on long or short positions with 200% exposure to BTC’s price volatility. 

The two funds—the T-REX 2X Long Bitcoin Daily Target ETF (CBOE: BTCL) and the T-REX 2X Inverse Bitcoin Daily Target ETF (CBOE: BTCZ)—do not hold spot BTC directly. Instead, they use financial derivatives to deliver 2x leveraged or inverse exposure to spot BTC.

Bitcoin ETFs have seen white-hot inflows in the past week amid a sharp pullback in spot prices spurred by multibillion-dollar BTC liquidations by Germany’s government and Mt. Gox, the defunct Japanese crypto exchange. Approximately $650 million has flowed into BTC ETFs since July 5, according to Farside Investors.

Related: Spot Bitcoin ETFs buy up $654M of BTC in 3 days

The ETFs bolster REX Shares’ existing suite of “T-REX” products, which include funds offering leveraged exposure to mega-cap technology stocks such as Apple (AAPL), Nvidia (NVDA) and Tesla (TSLA). In June, REX Shares surpassed $5 billion in assets under management (AUM), with its T-REX funds pulling upward of $1 billion since last year.

Leveraged ETFs tend to significantly underperform relative to the underlying spot asset as well as other strategies for gaining leveraged exposure to asset prices, according to a report by crypto trading firm GSR Markets.

The report said this is partly due to a phenomenon known as the constant leverage trap, whereby funds are forced to buy low and sell high to maintain a fixed leverage target. Leveraged ETFs also tend to charge relatively high management fees, adding an additional drag on performance.

High-conviction Bitcoin traders targeted in new long BTC ETFs image 0 Leveraged ETFs tend to underperform in the long run. Source: GSR

Rex Shares’ two new ETFs each charge management fees of 0.95%. That is significantly higher than spot BTC ETFs — such as Franklin Templeton Digital Holdings Trust (EZBC), VanEck Bitcoin Trust (HODL) and iShares Bitcoin Trust (IBIT) — which will charge fees of around 0.2% on average once promotional discounts expire.

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