SEC approves a 3x fix for bitcoin and ether traders who miss the wild swings
The SEC has approved a rule change allowing Volatility Shares to issue 3x leveraged ETFs for bitcoin and ether. These products are designed for short-term trading rather than long-term investment due to the risks of volatility decay.
Why it matters
This approval marks a significant expansion in crypto-linked financial products, though experts warn that the mechanical rebalancing required for 3x leverage can lead to substantial capital losses in volatile markets.
Traders who miss bitcoin's BTC $85,927.67 early volatile years have something new to look at.
On Oct. 2, the agency approved a Cboe BZX rule change to allow six ETFs issued by Volatility Shares, each aiming to deliver three times the daily return of the underlying asset. Besides bitcoin and ether, the lineup covers gold, silver, crude oil and natural gas.
That's a major milestone because, until now, crypto funds in the U.S. had been capped at 2x leverage.
The funds can't trade yet, as the issuer still needs the SEC to declare its registration statement effective , and the order doesn't set a deadline. These products will hold regulated futures tied to bitcoin and ether and not actual tokens.
Market veterans have been quick to point out who these funds are built for.
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