SEC Approves Listing of Volatility Shares' 3x Bitcoin and Ether ETFs

The U.S. Securities and Exchange Commission (SEC) has approved a rule change allowing the Cboe BZX Exchange to list six triple-leveraged exchange-traded products from Volatility Shares, including a 3x Bitcoin ETF and a 3x Ether ETF. This approval represents a notable first for U.S. regulators, as it permits crypto products with such high leverage.

However, there is a critical caveat: while the SEC has approved the listing, the funds cannot begin trading until the SEC declares their Form S-1 registration statements effective. This form serves as a disclosure document that informs investors about the products and associated risks, and the SEC has not provided a timeline for this review.

The proposed tickers for these funds are BITH for the 3x Bitcoin ETF and ETHK for the 3x Ether ETF. These funds aim to deliver three times the daily performance of their underlying futures benchmarks, rather than holding spot Bitcoin or Ether directly.

Volatility Shares is not new to leveraged crypto products, as it already manages a 2x Bitcoin ETF under the ticker BITX, with over $1.2 billion in assets. The new 3x funds will utilize daily rebalancing to target three times the return of their benchmarks, but this mechanism can lead to volatility decay, making them more suitable for short-term traders rather than long-term investors.

The approval positions Volatility Shares to expand its product offerings significantly, although the lack of a set trading date for the new ETFs leaves investors awaiting further developments.