I have been rather disappointed by the performance of ETH2xFLI. I hold TQQQ in my stock portfolio so I know what it’s like to hold leveraged products.
I bought into ETH2xFLI in July when ETH was around $2300. ETH has 2x’ed since then, but ETH2xFLI has only 3x’ed. I’m taking 100% more risk for only 50% more upside. I would expect that if ETH doubles, ETH2xFLI should at least quadruples. What a disappointment.
Is it because of the volatility and the fees? TQQQ does not suffer from such underperformance. In fact, TQQQ does more than 3x the gains. I do not want to take such risk with ETH if it cannot even deliver 2x the gains.
I’m considering simply swapping back into ETH and staking.
Welcome to the community and sorry that you are disappointed with the performance of ETH2x-FLI.
The FLI products are most suitable for shorter investment periods - days and weeks, rather than months. The underlying ETH is much more volatile than the Nasdaq that the TQQQ tracks, for this reason ETH2x-FLI can be more vulnerable to volatility drift. You can read more about that here:
just picked up some ETH2X-FLI, and was considering adding some more, as well as getting some BTC2X-FLI. I read how these products are meant to be more shorter termed. Is it safe to assume that the longer one holds on to these products, the 2X leverage will begin to reduce? In other words, the longer one holds them, the more likely the leverage drop (like 1.75%, 1.50%, 1.25%, etc.)?
Generally yes. The longer the timeframe the more volatility you are likely to experience. The volatility is what causes the price of leveraged assets to deviate from the target leverage ratio over time.
The flexible LR helps to offset some of the volatility: