What Is Cboe Asking The SEC To Approve?
Cboe BZX Exchange has filed a proposed rule change seeking U.S. Securities and Exchange Commission approval to list a group of 3x leveraged commodity exchange-traded funds, including products tied to Bitcoin and Ether.
The proposed lineup includes 3x Gold, Silver, Bitcoin, Ether, Crude Oil and Natural Gas ETFs. Each fund would seek to deliver three times the daily performance of its underlying asset, primarily through futures contracts traded on CME or COMEX, while holding cash and cash equivalents as collateral.
The Bitcoin and Ether funds would give investors access to substantially higher daily crypto exposure without directly holding the underlying tokens. A 1% daily gain in the benchmark would, before fees and tracking differences, translate into a targeted 3% move in the fund. The same leverage works in reverse when prices fall.
That makes the products considerably more aggressive than conventional spot crypto ETFs. They are intended primarily for short-term tactical trading rather than investors seeking to hold Bitcoin or Ether exposure for extended periods.
Why Do The Funds Need A Special SEC Filing?
The proposed ETFs cannot qualify under Cboe’s generic listing standards because those rules do not permit leveraged products of this type. Cboe therefore needs specific SEC approval through a proposed rule change before the funds can begin trading on the exchange.
Volatility Shares LLC would sponsor the funds, which would be organized under the VS Trust. A related Form S-1 registration statement is also expected to be filed under the Securities Act of 1933.
The products would be structured as commodity pools rather than traditional investment companies operating under the Investment Company Act of 1940. Commodity pools combine investor capital to trade futures, derivatives and other commodity-linked instruments.
That structure places the funds under Commodity Futures Trading Commission oversight in addition to the SEC processes governing their exchange listing and securities registration. Cboe described the arrangement as providing another layer of federal oversight compared with a physical commodity-based exchange-traded product.
The funds would continuously adjust their futures exposure as investors create or redeem shares and as benchmark values change. Those adjustments are necessary to maintain the targeted 3x daily exposure.
Investor Takeaway
A 3x Bitcoin or Ether ETF would expand the tools available to short-term traders, but it would not behave like simply owning three times as much of the underlying asset over longer periods. Daily leverage resets can make returns diverge sharply from three times the asset’s cumulative performance when markets are volatile.
How Risky Are 3x Crypto ETFs?
The main distinction is the daily investment objective. A leveraged ETF resets its exposure each trading day, meaning gains and losses compound from a new base after every session.
In a strong market moving consistently in one direction, that compounding can work in a trader’s favor. In volatile markets that repeatedly rise and fall, however, the same process can erode value even when the underlying asset ultimately finishes close to where it started.
That issue is especially relevant for Bitcoin and Ether because both assets can experience large daily price swings. A three-times multiplier magnifies those moves, increasing both potential gains and the speed at which losses can accumulate.
The products would also obtain most of their exposure through futures rather than simply holding Bitcoin or Ether. Their performance can therefore be affected by futures pricing, collateral management, contract adjustments and the cost of maintaining the targeted leverage.
For investors, the proposed funds would be better viewed as trading instruments than substitutes for conventional spot Bitcoin or Ether ETFs designed for longer holding periods.
Could 3x Crypto ETFs Expand The U.S. Leveraged Market?
Volatility Shares already offers 2x Bitcoin and Ether strategy ETFs in the U.S., giving the sponsor experience with leveraged crypto products. Approval of the new filings would push that model further by increasing the daily leverage target to three times the benchmark move.
There is already an international precedent. LeverageShares introduced 3x and inverse 3x Bitcoin and Ether exchange-traded products in Europe last year, showing that demand exists for instruments providing amplified crypto exposure.
The Cboe proposal would extend that approach to the U.S. market while also applying the same leverage structure to gold, silver, crude oil and natural gas. That broader lineup suggests the filing is not only a crypto initiative but part of a wider effort to expand leveraged commodity trading through exchange-listed products.
The SEC’s response will determine whether U.S. investors gain access to another level of crypto leverage through traditional brokerage accounts. If approved, the Bitcoin and Ether funds could attract active traders seeking amplified daily exposure, while also testing how much leverage regulators are prepared to permit within the rapidly expanding crypto ETF market.
