SEC Approves Rule for 3x Bitcoin and Ether Futures ETFs

The U.S. Securities and Exchange Commission approved a Cboe BZX rule change allowing the exchange to list six futures-based products that target three times the daily performance of Bitcoin, Ether, gold, silver, crude oil and natural gas.

The approval was issued Oct. 2 under Release No. 34-106577. It covers products from Volatility Shares Trust, including the 3x Bitcoin ETF and 3x Ether ETF. Volatility Shares LLC is the sponsor, and the funds would be listed on Cboe BZX.

The products cannot begin trading until their Form S-1 registration statements become effective under the Securities Act of 1933. The SEC did not provide a timeline for that filing requirement, so no launch date has been disclosed.

The Bitcoin and Ether funds would not hold the digital assets directly. They would use futures contracts, which are agreements to buy or sell an asset at a set price on a later date. The four commodity products would use the same structure.

Each fund seeks to provide three times the performance of its underlying asset for a single trading day. The leverage target resets daily, so returns over a week or month can differ from three times the asset’s performance over the same period.

Alternating gains and losses can reduce a fund’s value through compounding, even if the underlying asset ends a period near its starting price. The effect can increase when prices move sharply.

Cboe BZX submitted the proposed rule change Aug. 10, and the SEC published notice of it Aug. 14. The approval addresses rules for leveraged commodity-based trust shares and allows the exchange to proceed once the registration requirements are met.

The decision follows the SEC’s approval of spot Bitcoin exchange-traded funds after a court challenge to the agency’s rejection of a proposed spot Bitcoin fund. The six products covered by the latest decision would obtain exposure through futures contracts rather than directly holding Bitcoin or Ether.