Why are more and more traders shifting from contracts to ETFs? Latest insights for 2026

The crypto market has never lacked excitement, but the margin call data in 2026 still sends chills down many traders' spines. On June 16, Bitcoin's price surged above $66,000, with the total liquidation amount across the network approaching $600 million in 24 hours. In a highly volatile market environment, perpetual contracts, due to their high leverage features, have become hotspots for liquidations. This context has given rise to a notable trend—more and more people are shifting from traditional high-risk contract trading to more stable structured crypto ETF products.

The Spot ETF Market Size Breaks $80 Billion

As of mid-June, the total net assets of US Bitcoin spot ETFs have reached $79.65 billion, accounting for 6.26% of Bitcoin's total market cap. In less than two and a half years, the cumulative trading volume of US spot Bitcoin ETFs is expected to surpass $2 trillion. ETFs, as financial instruments with inherent custody, compliance, and transparency features, are attracting large-scale inflows from retail to institutional investors.

On June 16, the Bitcoin spot ETF recorded approximately $66.61 million in net inflows, equivalent to about 1,000 BTC. After 13 consecutive days of net outflows earlier in June, the market sentiment shift is particularly noteworthy. This volume has grown significantly compared to the past year, indicating that institutional investors' recognition of Bitcoin ETFs is rapidly increasing.

The "Two Highs and One Low" of Contracts Forcing Traders Out

Contract trading has been a hotbed of high volatility over the past few years. In April 2026, the trading volume of perpetual futures led by Gate reached $368 billion, with Binance close behind at $298 billion. Solana's monthly perpetual futures trading volume in May soared to $76.7 billion, setting a new record.

However, the massive trading scale cannot hide the fatal flaws of contracts. First, the high liquidation risk, where volatile markets can easily trigger forced liquidations or even negative balances; second, high funding rates, where the costs of rolling over long-term positions continuously erode profits; third, operational complexity, with extremely high entry barriers. Especially for ordinary retail traders, the margin mechanisms and forced liquidation rules of contracts are often the root causes of losses. When more people realize the severe imbalance between contract risks and rewards, ETF products—requiring no margin and no worries about liquidation—are becoming the new favorites.

Rate Continues to Drop: ETF Holding Costs Are Much Lower Than Expected

Many believe that ETF management fees are a significant expense. However, data shows that by April 2026, the fees for major spot Bitcoin and Ethereum products have standardized to between 0.12% and 0.25%, a dramatic drop from the 1.5% to 2% rates at the beginning of 2024. Take IBIT as an example, with management fees reduced to 0.25%, making it nearly ten times the size of similar Ethereum ETFs. The current low fee range makes ETFs competitive with self-holding and contracts in terms of cost.

Why Are Gate Traders Especially Interested in ETF Products?

By June 2026, Gate ETFs have supported trading over 350 tokens, offering 3x/5x leverage long and short options, with a unified daily management fee of 0.1%. Compared to the complex parameters of perpetual contracts, Gate ETF's spot-like operation mode is much simpler. Users buying and selling BTC3L/BTC3S do not need to consider margin, collateral ratio, liquidation price, or other complicated factors—making the experience almost identical to regular token trading.

By February 2026, Gate ETF's monthly total trading volume exceeded 20k USDT, ranking among the top in overall ETF trading volume. This data indicates that ETF traders on the Gate platform have formed a significant scale effect, and trading volume continues to grow rapidly. More importantly, Gate ETF's product line has expanded from crypto assets to traditional financial assets, covering NVDA, TSLA, NASDAQ 100, gold, crude oil, and other traditional assets, allowing users to switch between core global assets 24/7 with a single Gate account.

Compliance and Regulation: The Natural Fortress of ETFs

Spot ETFs are regulated by mainstream financial authorities such as the SEC, requiring transparent disclosure, asset custody, and compliance audits. In the long run, this structure provides investors with trading security and post-trade recourse that contract markets lack.

Especially under the push of the CLARITY Act, crypto ETFs are becoming common assets in retirement accounts and institutional portfolios. For contract users, even large exchanges, with their market maker mechanisms and risk reserve schemes, lack transparency, and black swan events such as withdrawal blocks or trading halts are not uncommon.

From High-Leverage Speculation to Structured Allocation

As the crypto market gradually moves from its early wild stage toward mainstream compliance, traders' mindsets are evolving. The previous dominant trading style of "betting with 100x leverage" is being replaced by investors who prioritize stable returns and principal protection.

More traders are beginning to understand that high-frequency opening and closing of contracts and multiple liquidations may not be suitable for most retail users. ETF products not only track spot prices but also serve as convenient tools for multi-asset allocation. Switching freely among gold, oil, indices, and crypto assets without repeatedly registering or switching platforms offers a low-friction investment experience that attracts more conservative investors.

Summary

Overall, the shift from contracts to ETFs is not just a passing trend but a structural change driven by the maturity of the crypto market. As the total net assets of spot ETFs approach $80 billion, management fees hit record lows, and liquidation risks remain high, more and more traders will naturally choose safer, more transparent, and more convenient crypto asset allocation tools. As a leading one-stop trading platform, Gate ETF, with its rich product line supporting over 350 tokens, multi-asset coverage, and simple trading experience, provides a low-threshold option for users considering moving from contracts to ETFs. For traders in the high-volatility crypto market, each strategic choice directly impacts long-term capital survival, and ETFs are offering a more stable path for compliant crypto traders in the evolving regulatory landscape.

FAQ

Q1: Are ETFs really safer than contracts?

Yes. ETFs do not require margin, have no liquidation mechanism, and the maximum loss is the invested principal. Contracts, on the other hand, can trigger forced liquidations during sharp price swings, potentially wiping out the principal or even incurring negative balances. Moreover, spot ETFs assets are held in custody by regulated institutions, offering much higher transparency than contract counterparties.

Q2: Is trading ETFs on Gate difficult?

Not at all. Gate ETFs use a spot-like operation mode, allowing users to buy or sell products like BTC3L/BTC3S directly with a spot account, without switching to contract accounts. The minimum trading thresholds are also user-friendly.

Q3: Will ETF management fees be expensive?

By 2026, the fees for major spot Bitcoin and Ethereum ETFs have dropped to between 0.12% and 0.25%, with Gate ETF's unified management fee at 0.1% daily. Compared to the funding rate losses and potential liquidation losses in contracts during volatile markets, ETF holding costs are more controllable in most scenarios.

Q4: Are ETFs suitable for long-term holding or short-term trading?

It depends on the specific product type. For spot ETFs, long-term holding is a simple and transparent asset allocation method. For leveraged ETFs (like Gate's 3x/5x leverage products), due to oscillation decay and compounding effects, they are more suitable for short-term trend trading and not recommended for long-term holding.