Ethereum 3x ETF Could Hit CME Threshold with $362 Million in Assets

Ethereum’s proposed 3x ETF, ETHK, could reach the Chicago Mercantile Exchange’s (CME) futures threshold with just $362.1 million in assets. At ETHU’s October 6 futures valuation, a 3x Ethereum ETF with that amount would target about $1.09 billion in exposure. If held entirely in standard CME Ether futures, this would equal 8,000 contracts, which is CME’s accountability level for both single-month and all-month positions.

The SEC approved Cboe BZX’s rule change to list Volatility Shares’ proposed ETHK on October 2, though its first trading date is still pending. As of October 6, Volatility Shares’ existing ETF, ETHU, held 19,204 October CME Ether futures contracts worth $2.61 billion, against $1.31 billion in net assets as of October 5. These holdings imply $135,800 in notional value per contract, placing 8,000 contracts at approximately $1.0864 billion. A fund targeting three times daily exposure would need one-third of that in assets, or about $362.1 million.

CME’s accountability level is a threshold, and participants can hold positions above it, as ETHU currently does. CME Market Regulation can request information about positions under Rule 560, even below the 8,000-contract level. CME’s rules also allow it to order participants to stop adding to a position or reduce it to maintain an orderly market.

If ETHK holds its full target exposure in standard CME Ether futures, its contract equivalent would be about 2,209 contracts at $100 million in assets, 11,046 at $500 million, and 22,091 at $1 billion. These counts are based on ETHU’s October 6 valuation and will fluctuate with futures prices and portfolio construction. The combined position of ETHU and ETHK could reach significant levels if CME aggregates their holdings due to shared management by Volatility Shares.