The U.S. SEC approved the first 3x leveraged Bitcoin and Ethereum ETPs on October 2. There’s one thing about this news that most people missed: it approved the listing rules, not the products.
What got the green light was a rule change submitted by Cboe BZX. The products are from Volatility Shares, six in total. Also approved in the same batch were products linked to gold, silver, crude oil, and natural gas—Bitcoin and commodities were approved together.
But “approved for listing” and “available to buy” are two different things. The products still need to wait for their S-1 registration statements to become effective before they can go on sale. No date has been announced.
Also, these six products don’t hold actual coins. They use futures, which have to be rolled over continuously as they expire, and rolling them over comes with a cost. The 3x leverage is also “daily” 3x: it resets every day. Hold them for longer and you might not get “three times the gains”; in a volatile market, returns can be eroded.
So the next time you see “the SEC approved a 3x leveraged ETF,” ask one thing first: Is it available to buy yet?
$BTC #bitcoin
Do you think these kinds of leveraged products give ordinary crypto holders another tool—or another trap?
What got the green light was a rule change submitted by Cboe BZX. The products are from Volatility Shares, six in total. Also approved in the same batch were products linked to gold, silver, crude oil, and natural gas—Bitcoin and commodities were approved together.
But “approved for listing” and “available to buy” are two different things. The products still need to wait for their S-1 registration statements to become effective before they can go on sale. No date has been announced.
Also, these six products don’t hold actual coins. They use futures, which have to be rolled over continuously as they expire, and rolling them over comes with a cost. The 3x leverage is also “daily” 3x: it resets every day. Hold them for longer and you might not get “three times the gains”; in a volatile market, returns can be eroded.
So the next time you see “the SEC approved a 3x leveraged ETF,” ask one thing first: Is it available to buy yet?
$BTC #bitcoin
Do you think these kinds of leveraged products give ordinary crypto holders another tool—or another trap?