SEC approves first 3x leveraged Bitcoin and Ether ETPs

The U.S. Securities and Exchange Commission (SEC) has approved rule changes for the Cboe BZX Exchange that clear the way for the first triple-leveraged (3x) Bitcoin and Ether exchange-traded products (ETPs). Sponsored by Volatility Shares LLC under the VS Trust umbrella, these products aim to provide 300% of the daily performance of their underlying assets.

The approved suite includes 3x leveraged products for Bitcoin and Ether, alongside gold, silver, crude oil, and natural gas. These vehicles are designed to track daily returns; however, the SEC noted that due to daily rebalancing and compounding effects, long-term returns may differ significantly from three times the cumulative return of the underlying asset. Investors face high risks, including the potential to lose their entire investment.

While the SEC has approved the regulatory framework for listing these products, actual trading cannot begin until the respective registration statements become effective. This decision marks a significant expansion of regulated crypto-linked derivatives available on American equities exchanges.