SEC Approves 3x Ethereum ETF, But ETF Flows Show No Improvement
The U.S. Securities and Exchange Commission (SEC) has approved a 3x Ethereum ETF proposal from Cboe BZX, alongside five other similar products. This approval allows the Volatility Shares 3x Ether ETF to amplify both positive and negative price movements in Ether futures by up to three times. However, it's essential to note that this is an unleveraged daily reset product, which means volatile swings can cause returns to diverge sharply from three times ETH's longer-term performance.
According to the SEC, futures-based leveraged products carry rollover costs as the underlying contracts are repeatedly bought and sold at higher prices. This can lead to tracking errors compared with Spot ETH. Despite the potential benefits, trading in this ETF is not yet available, as it still requires completion of the S-1 registration process.
Interestingly, the ETF flows didn't seem impressed by the announcement, with data recording more outflows. The four-day reversal removed $155 million after September's inflow streak, indicating that investors have not shifted toward ETH exposure despite the leveraged route. ETF assets also slipped from $17.92 billion on the 22nd of September to $17.46 billion, shedding a whopping $460 million.
The price of ETH is holding above $2,700, despite the massive outflows. Buyers are absorbing the selling near the middle of a broader range, but have struggled to turn this defense into a sustaining breakout. The range remains intact, but the pressure is building on both sides, with a break above $2,800 potentially restoring momentum toward $3,000.