SEC Approves First 3x Bitcoin and Ether Funds With Significant Risks
The Securities and Exchange Commission (SEC) has approved the first triple-leveraged Bitcoin and Ether funds in the United States. On October 2, 2026, Volatility Shares received the green light to list these funds, along with similar products for gold, silver, crude oil, and natural gas, on the Cboe BZX exchange. The 3x Bitcoin fund will use the ticker BITH, and the 3x Ether fund will use ETHK. However, these funds won't be available for trading until their registration statements are finalized, and Volatility Shares has not yet announced a launch date.
The new funds aim to deliver three times the daily movement of their respective cryptocurrencies. They will rely on futures contracts rather than holding the physical coins, and they will rebalance at the end of each trading day, resetting their exposure to three times the remaining balance. This means the 3x target applies only for a single day, not over a longer period. The daily reset feature introduces volatility decay, which can amplify losses beyond the underlying asset's performance. For example, if Bitcoin increases by 10% one day but then decreases by 10% the next, the 3x fund could show a 30% gain followed by a 30% loss, leading to an overall decline of 9%.
The high volatility of Bitcoin and Ether can accelerate this decay. For instance, Bitcoin traded within an 8% range in a single day in September 2026, while Ether experienced a 23% range in August 2026. With three times leverage, a single-day drop of around 33% in the coin's value could wipe out the entire fund. As of October 5, 2026, Bitcoin was trading around $86,189, down 30% over the past year, while Ether was around $2,724, down 39% and 45% off its peak.
These 3x funds are best suited for short-term traders who plan to hold assets for only a day or a few days and regularly monitor their positions. They are not ideal for long-term investors, as daily resets can hurt returns even when the cryptocurrency trends upward over several months. For those looking to capitalize on a potential multi-month rebound, it's often better to hold the actual coins or invest in an unleveraged spot fund.