SEC Clears Listings for Leveraged Bitcoin and Ether Exchange-Traded Products

The US Securities and Exchange Commission (SEC) has approved listings for six Volatility Shares products sponsored by Cboe BZX, including three times Bitcoin and Ether exchange-traded products (ETPs).

The ETPs will have daily return targets that can produce unexpected results for investors holding them over several sessions. The SEC's order does not set a first trading day, but listing clearance alone does not establish that the products are available to buy.

The return target starts with a futures benchmark, which provides price exposure through contracts that expire on a set date. The exchange's proposal describes benchmarks built from first- and second-month contracts, with the portfolios holding futures and cash or cash equivalents to support those positions.

For the Bitcoin and Ether products, the return target is tied to futures prices, which can move differently from the prices quoted on a spot exchange. A 3% Bitcoin move on a trading app would therefore not establish that the Bitcoin product should gain 9%. The relationship between expiring and replacement contract prices can affect performance, alongside fees and trading costs.

Investors will own shares in the resulting portfolio, with no Bitcoin or Ether to withdraw into a personal wallet. The exposure comes through derivatives, so money entering these products should not be treated as an equivalent purchase of coins in the spot market.