Cryptocurrency volatility will inevitably show itself, but while crypto pulls back amid a global adoption, traders could look to leveraged gold miner exchange traded funds (ETFs) from Direxion Investments to move forward.
The major cryptocurrencies like Bitcoin and Ethereum all faltered amid the former’s adoption as legal tender in the country of El Salvador. A deluge of issues on cryptocurrency exchanges also took place as stocks like Coinbase tumbled.
“When this move was first announced, it didn’t have nearly as big of an impact on price as some may have expected it might, possibly because El Salvador’s population is less than New York City’s, but also because the announcement was light on details and people were on the fence about how this was going to be implemented,” said Leah Wald, CEO at Valkyrie Investments.
— Reuters (@Reuters) September 7, 2021
A Pair of Mining Options to Consider
Meanwhile, back in the tangible asset world, gold prices continue to try and break out of a holding pattern and back towards the upside. For risk-averse traders who appreciate the volatility, another way to play moves in gold prices is via miners.
“Gold mining companies are a great way to trade the price of gold since their revenues, and therefore values, are a natural leveraged play on the price of gold,” a Direxion The Xchange blog post noted. “Gold miners’ input costs are even measured in dollars per ounce sometimes.”
“Not only do gold mining companies usually track well with the price of gold, but they tend to have more volatility than the gold spot price,” the blog post added. “This gives the most risk-taking traders more entry and exit opportunities. Traders considering gold ETFs should take a closer look at these 2x leveraged gold ETFs.”
One option is the Direxion Daily Gold Miners Bull 3X ETF (NUGT). NUGT seek results equal to 200% of the daily performance of the NYSE Arca Gold Miners Index, which is comprised of publicly traded companies that operate globally in both developed and emerging markets.
Another option is the Direxion Daily Jr Gold Miners Bull 2X ETF (JNUG). JNUG gives 200% exposure to the daily performance of the MVIS Global Junior Gold Miners Index. The index includes companies from markets that are freely investable to foreign investors, including “emerging markets,” as that term is defined by the index provider.
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