Cboe Seeks SEC Approval for 3x Bitcoin and Ethereum ETFs

Cboe BZX files with the SEC to launch 3x leveraged Bitcoin and Ethereum ETFs, potentially expanding the market for high-volatility crypto products.

The proposal could expand the market for leveraged products tied to the two largest cryptocurrencies, though the SEC’s publication of the filing does not yet constitute an official approval.

Six New Funds to Offer 3x Daily Exposure

The document covers a suite of leveraged products: 3x BTC ETF, 3x ETH ETF, 3x Gold ETF, 3x Silver ETF, 3x Crude Oil ETF, and 3x Natural Gas ETF. These funds will operate under VS Trust, with Volatility Shares LLC serving as the sponsor.

Each product aims to achieve a daily performance result, before fees and expenses, equal to three times the daily return of its respective benchmark.

Specifically, the Bitcoin fund will seek to triple the daily movement of Bitcoin futures. If futures rise by 2% in a single session, the ETF targets a gain of roughly 6%; conversely, a 2% decline would result in a loss of approximately 6%.

Investors should note that this triple-leverage target applies only to a single day. Due to daily rebalancing, returns over a week or a month may deviate significantly from three times the performance of the underlying asset over that same period.

Bitcoin and Ethereum Funds to Utilize Futures

These new products will differ from spot BTC and ETH ETFs, which gain exposure through direct ownership of the underlying cryptocurrency.

The 3x Bitcoin ETF will primarily utilize CME Bitcoin futures with first and second-month maturities. The Ethereum fund will follow a similar strategy using CME ETH futures.

The gold and silver funds will rely mainly on COMEX contracts, while the crude oil and natural gas products will utilize NYMEX contracts.

Cash and cash equivalents will be used as collateral for these derivative positions.

Why Cboe Requires Specific Permission

The inclusion of triple leverage is the primary reason Cboe BZX is seeking specific SEC approval.

Existing BZX standards for these types of products do not allow for automatic listing when a fund targets a predetermined multiplier of a benchmark’s performance. Consequently, the exchange submitted a formal proposal for a rule change.

This proposal is not the first attempt at leveraged crypto ETFs in the U.S., where 2x Bitcoin and Ethereum products are already trading. The novelty here lies in the shift toward three-times daily exposure.

Cboe points out that the U.S. market already hosts approximately 67 exchange-traded products with 3x or -3x exposure, including 51 ETFs and 16 exchange-traded debt instruments.

What’s Next for 3x Bitcoin and Ethereum ETFs

The SEC has not yet approved the funds; the published document simply marks the beginning of the formal review process.

Following its publication in the Federal Register, the SEC has an initial 45-day window to approve or tower the proposal. This deadline can be extended under specific conditions.

The funds must also satisfy other regulatory requirements before trading can begin. While the filing paves the way for a new wave of crypto ETFs in the U.S., a definitive listing date has not been set.