SEC Approves First 3x Leveraged Bitcoin and Ether ETFs

The U.S. Securities and Exchange Commission (SEC) has approved the first triple-leveraged Bitcoin and Ether exchange-traded products (ETPs) to be listed in the United States. This approval allows traders to access funds that aim to deliver three times the daily performance of Bitcoin and Ether futures before fees and expenses.

The approved products include the 3x Bitcoin ETF (ticker: BITH) and the 3x Ether ETF (ticker: ETHK), both part of the VS Trust sponsored by Volatility Shares. The SEC’s approval does not mean the funds are trading yet, as their registration statements must become effective before shares can begin trading on the Cboe BZX exchange.

The 3x objective of these funds applies only to daily returns, not long-term performance. This means that while the funds seek to triple the daily returns of their respective futures benchmarks, their longer-term performance can differ significantly due to volatility decay. The SEC classified these products as Commodity-Based Trust Shares rather than conventional ETFs.

The preliminary prospectus warns that investors could lose the full value of their investment in a single day or overnight under certain market conditions. The funds are not yet available to trade, and investors should not treat the 3x daily target as three times Bitcoin or Ether’s long-term return. The next step is for Volatility Shares’ registration statements to become effective, after which BITH and ETHK could begin trading on Cboe BZX.