Why do leveraged tokens need to reverse split? (2025)
Cryptocurrency leveraged tokens market 24⁄7All-weather trading is susceptible to significant market fluctuations. By 2025, Gate (Gate.io) will implement a Reverse split when the token price reaches the threshold of 0.001 Tether (USDT), using standardized ratios (1:50, 1:100, 1:200), with a 72-hour advance notice. These reverse splits will consolidate existing tokens into fewer but higher-value tokens, bringing the price to a more “tradeable” level. Latest data shows that liquidity increased by 40% after the split, supported by a new analytical dashboard from Gate (Gate.io) that allows viewing split history and simulations.
Update in 2025
In 2025, Gate continues to enhance leveraged tokens management. The latest data shows:
- Reverse splits are now typically triggered when the price reaches the 0.001 USDT threshold.
- The split ratio is standardized to 1:50, 1:100, and 1:200, based on market conditions.
- The announcement period is extended to 72 hours before implementation.
- Enhanced post-split liquidity tracking shows a 40% increase in trading volume.
- The new analytics dashboard provides split history and simulation tools.
These improvements optimize the trading experience and maintain appropriate Token pricing under volatile market conditions.
Why do leveraged tokens need to be reverse split?
The cryptocurrency leveraged tokens market is open for trading around the clock and may be affected by significant market fluctuations. Typically, when the price of leveraged tokens is too low, Gate may announce a Reverse split to bring the price back up to a more “tradable” level and increase liquidity. A Reverse token split is the process of consolidating the number of existing issued tokens into a smaller number of proportionally more valuable tokens.
Specifically, when the price of leveraged tokens is too low, in order to prevent any adverse effects on the trading experience of users, Gate will perform a reverse split of the leveraged tokens. The exact price that triggers the reverse token split may vary based on market conditions:
According to the 1:100 Reverse split ratio of DASH3L, if the price of DASH3L is $0.005 and the user holds 1000 DASH3L before the reverse split, the user will ultimately hold each at $5 after the reverse split. The total value of the DASH3L held by the user will not change, remaining at 5 USDT before or after the reverse split.
On Gate, there will be an official announcement for each Reverse split. Before the Reverse split, Gate will temporarily suspend the trading service for leveraged tokens, and any open orders will be canceled.
Investors can pay attention to the announcements to understand the details of the Reverse split of leveraged tokens. After the Reverse split is completed, Gate will resume trading services for these leveraged tokens.
Please note that the price after the split will fluctuate around the new unit value. Therefore, investors should be cautious when placing orders.
After the Reverse split, the candlestick chart will have a leap, and you can use the split adjustment feature to get a smoother chart.
If your portfolio contains a leveraged token that has announced a reverse split, it is helpful to understand how it will affect your position and the overall value of your portfolio through calculation.
Before engaging in any leveraged tokens trading or purchasing, you may want to review the history of the tokens to see if they have ever had a reverse split.
Segmentation is not necessarily the reason for you to buy or not buy leveraged tokens, but it provides you with additional information about the token itself when you analyze its value.
