Cboe Proposes First-Ever 3x Leveraged Bitcoin ETF

The Cboe BZX Exchange has proposed listing and trading the first-ever 3x leveraged Bitcoin ETF in the US. Volatility Shares LLC, the firm behind the product, is sponsoring a suite of 3x leveraged funds covering Bitcoin, Ether, Gold, Silver, Crude Oil, and Natural Gas.

The fund would aim to deliver daily investment results equal to three times the performance of Bitcoin, achieved through first- and second-month CME Bitcoin futures contracts. This means that if Bitcoin futures rise 2% in a day, the fund targets a 6% gain.

However, it's essential to note that the compounding effect of daily rebalancing can cause the fund's returns to diverge significantly from simply tripling Bitcoin's cumulative return over longer holding periods. A volatile market can eat into returns even if the underlying asset ends up flat.