How to Achieve Excess Returns with Gate ETF Token: Strategy Analysis for December 2025

On December 22, 2025, Gate's native Token GT successfully broke through the 10 dollar mark. For investors familiar with the crypto market, holding GT directly is just one way to participate.

Investors focused on excess returns are turning their attention to a basket of more complex financial instruments—Gate ETF Tokens. These tools aim to exceed the price increase of the underlying tokens themselves through strategically combined derivatives or leverage amplification mechanisms.

01 Revenue Basics: How Gate ETF Tokens Generate Cash Flow

The core appeal of the Gate ETF Token lies in its ability to generate cash flow that surpasses ordinary coin holding. This is mainly achieved through two mechanisms: first, investing in ETFs that employ options income strategies, and second, utilizing the leveraged tokens provided by the Gate platform.

A YieldMax Gate Option Income Strategy ETF indirectly related to Gate, with the stock code GATY. This ETF does not directly hold GT, but operates through a basket of complex derivative strategies.

It adopts a synthetic covered call strategy, generating premium income by selling option contracts, and distributing this income to investors in the form of dividends. According to market data as of October 2025, the expected annualized dividend yield of this strategy is close to 48%.

The Gate platform also offers a type of ETF product known as “leveraged tokens.” Unlike the income strategy of GATY, leveraged tokens aim to achieve daily fluctuations in the underlying asset's price by several times through derivatives such as futures contracts.

For example, a 3x bullish leveraged Token should theoretically increase in value by about 15% when Bitcoin rises by 5%. Its initial net value is usually anchored at 1 USDT, allowing investors to gain leveraged exposure by buying and selling on the spot market without the need to manage margin or face liquidation risks.

02 Yield Catalysts: How Market Events Drive Potential Returns

The realization of excess returns relies not only on product design but also on the catalyst of market momentum. For the Gate ecosystem, a potential huge catalyst is the approval outlook for the Gate Token spot ETF.

Market analyst Pumpius pointed out that if the U.S. Securities and Exchange Commission approves multiple spot Gate Token ETFs during the decision window at the end of October 2025, it may trigger a significant supply and demand imbalance.

Analysts predict that due to a large amount of GT being locked in custody accounts or held long-term by large entities, the actual supply circulating in the market is relatively limited. Once institutional funds flow in on a large scale through ETF channels, the first month's inflow could exceed 500 million dollars, and this demand could push the price of GT towards 50 dollars.

In addition to macro benefits, the optimization of the product's own strategy is also a guarantee of continuous returns. The selected high-yield strategy ETFs under Gate strengthen their earning ability through four key adjustments:

• Increase the number of investment targets from 30 to 40 to diversify risks.
• Increase the single asset weight limit from 10% to 15% to focus on core high-yield projects.
• Strengthen the quality of the underlying assets with a three-tier screening mechanism.
• Set a rebalancing limit to maintain portfolio stability

These adjustments bring the total proportion of the DeFi and mining project holdings of the ETF to 56%, and the staking and mining income generated from these sectors can contribute considerable underlying returns to the ETF shares.

03 Risk Management: Controlling Drawdown While Amplifying Returns

High returns are inevitably accompanied by high risks. Whether it is high-dividend ETFs or leveraged Tokens, understanding their inherent risks is the prerequisite for managing an investment portfolio and achieving excess net returns.

For options income-type ETFs like GATY, the most significant risk is that the upside potential is limited. When the GT price skyrockets, due to the strategy of selling call options, the ETF's increase will lag behind directly holding coins. In addition, its total expense ratio of up to 0.99% will erode long-term returns, and dividends are not guaranteed and may be reduced or canceled under extreme market conditions.

For leveraged tokens, the main risks stem from volatility decay and directional error. Due to the daily rebalancing of leveraged tokens to maintain a fixed leverage ratio, in markets where the underlying asset's price fluctuates sharply without a clear trend, the token's net value may continue to erode.

Even if the long-term direction is correct, a sharp short-term correction can still have a significant impact on highly leveraged positions.

Professional position management is crucial. A strategy known as the “2% risk rule” is widely adopted.

The specific operation is: first determine the maximum loss you are willing to bear for a single transaction (for example, 2% of the total funds), then divide that amount by the leverage multiple to back-calculate a reasonable position size. This can effectively prevent catastrophic drawdowns in the account due to a single misjudgment.

04 Strategy Optimization: Adjusting Allocation Based on Market Cycles

To achieve excess returns, investors need to dynamically adjust the allocation weights among various Gate ETF Tokens based on different market stages. This is not a static holding process, but rather a dynamic strategy execution process.

In a bull market launch or primary decline phase where market trends are clear, leveraged tokens are a tool for capturing excess returns. Research shows that in strong one-sided trend markets, due to the compounding effect of daily rebalancing, leveraged tokens can generate excess returns of 12% to 18% compared to simple leveraged spot trading.

Investors can confirm trend strength and improve entry win rates by combining technical indicators (such as the “golden cross” where the 50-day moving average crosses above the 200-day moving average) with signals of increased trading volume.

During the phase of sideways consolidation or mild upward movement in the market, the allocation value of options yield-type ETFs like GATY is highlighted. At this time, the expectation of a significant increase in the underlying asset price weakens, and generating income through selling options becomes a more stable source of revenue. The nearly 48% annualized dividend yield provides a highly attractive “cash flow shield” in this environment.

During the period of brewing major positive expectations, such as before and after the critical window for the approval of the Gate spot ETF, one could consider building a “core + satellite” portfolio.

Allocate the majority of funds to directly holding GT or low-leverage Tokens as the “core” to capture the growth of underlying value; at the same time, allocate a portion of funds to option income ETFs as the “satellite” to earn additional income during market news waiting and volatility increases, while hedging some uncertainty risks.

Future Outlook

As of December 22, 2025, the Gate ecosystem offers investors two differentiated paths for excess returns. Some strategies aim to provide a stable cash flow of nearly 48%.

Others amplify each market fluctuation with leverage of up to 5 times. On the analysts' forecast chart, a dotted line winds from $10 to a peak of $50; whether this path can become a reality ultimately depends on the intersection of capital flow and market consensus.