On October 2, the SEC approved a Cboe BZX rule change (Release No. 34-106577), clearing the way for the listing of six triple-leveraged ETPs from Volatility Shares, including 3x $BTC and 3x $ETH , along with products tied to gold, silver, crude oil, and natural gas. The reported tickers are BITH and ETHK.
Let’s clarify how they work before getting to the conclusion. These products target three times the underlying asset’s performance for a single day. Because leverage resets daily, holding them for more than a day can cause compounding to make actual returns diverge significantly from 3x. In choppy markets, that means a predictable drag—also known as volatility decay. They don’t hold the underlying assets, either: the Bitcoin and Ethereum products gain exposure through CME futures, use cash and cash equivalents as collateral, and face an additional drag from futures-roll costs.
There’s another easily overlooked detail: the SEC classified them as “commodity-based trust shares” under the Securities Act of 1933, excluding them from the Investment Company Act of 1940. On August 10, Cboe also had to file a separate rule change because its existing generic listing standards excluded leveraged and inverse products.
So keep in mind: “approved for listing” does not mean “ready to trade.” Trading cannot begin until the S-1 registration statement becomes effective, and no official timeline has been provided.
My take: the significance is that regulators have opened the door to highly volatile structured products—not that new money is flowing into spot markets. The likely buyers are day traders, and day traders are also the ones most likely to get hurt by them.
What do you think: are 3x products a sign of a maturing market, or do they just fast-forward retail investors’ losses?
#SECApprovesListingOf3xBitcoinETFs
Let’s clarify how they work before getting to the conclusion. These products target three times the underlying asset’s performance for a single day. Because leverage resets daily, holding them for more than a day can cause compounding to make actual returns diverge significantly from 3x. In choppy markets, that means a predictable drag—also known as volatility decay. They don’t hold the underlying assets, either: the Bitcoin and Ethereum products gain exposure through CME futures, use cash and cash equivalents as collateral, and face an additional drag from futures-roll costs.
There’s another easily overlooked detail: the SEC classified them as “commodity-based trust shares” under the Securities Act of 1933, excluding them from the Investment Company Act of 1940. On August 10, Cboe also had to file a separate rule change because its existing generic listing standards excluded leveraged and inverse products.
So keep in mind: “approved for listing” does not mean “ready to trade.” Trading cannot begin until the S-1 registration statement becomes effective, and no official timeline has been provided.
My take: the significance is that regulators have opened the door to highly volatile structured products—not that new money is flowing into spot markets. The likely buyers are day traders, and day traders are also the ones most likely to get hurt by them.
What do you think: are 3x products a sign of a maturing market, or do they just fast-forward retail investors’ losses?
#SECApprovesListingOf3xBitcoinETFs