SEC Approves First 3x Bitcoin and Ether ETFs with High Risks

The U.S. Securities and Exchange Commission (SEC) has approved the first 3x Bitcoin and Ether exchange-traded funds (ETFs) on October 2, 2026. Volatility Shares will list these triple-leveraged funds, which track the daily movements of Bitcoin (BTC) and Ethereum (ETH) using futures contracts. The 3x Bitcoin fund will trade under the ticker BITH, and the 3x Ether fund under ETHK. While the approval is official, the funds won't be available for trading until their registration statements are finalized, and no launch date has been announced yet.

The funds will reset their exposure daily, meaning the 3x leverage applies only to each day's performance, not over longer periods. This feature introduces volatility decay, a significant risk. For example, a 10% gain in Bitcoin followed by a 10% loss would result in a 1% loss for Bitcoin directly, but a 9% loss for the 3x fund. A single 33% daily drop in the underlying asset could wipe out the entire fund, making these products high-risk and suitable only for short-term traders who monitor their positions daily.

Both Bitcoin and Ethereum are known for their volatility, which can accelerate the decay of leveraged funds. On September 21, Bitcoin traded within an 8% range in a single day, while Ethereum experienced a 23% swing on August 19. As of October 5, Bitcoin was trading around $86,189, down 30% over the past year, and Ethereum was around $2,724, down 39% from its peak.

The 3x Bitcoin and Ether ETFs are designed for short-term traders rather than long-term investors. The daily resets can erode returns even if the cryptocurrency trends upward over several months. For those seeking to capitalize on a potential rebound, holding the actual coins or investing in an unleveraged spot fund may be more suitable.