SEC Opens Public Comment on CBOE Proposal for First U.S. Leveraged Crypto ETFs

The U.S. Securities and Exchange Commission (SEC) has opened public comment on a proposal by CBOE BZX Exchange to list six leveraged exchange-traded funds (ETFs), including the first three times daily returns of Bitcoin and Ethereum.

CBOE BZX submitted a rule change proposal to list these ETFs, which would allow traders to gain magnified exposure to price movements without directly holding the underlying cryptocurrency. The SEC's decision marks a significant step in integrating digital assets into mainstream financial products.

The proposal includes a 3x Bitcoin ETF, a 3x Ethereum ETF, and leveraged funds for gold, silver, crude oil, and natural gas. Leveraged ETFs aim to deliver daily returns that are three times the performance of the underlying asset, offering traders amplified exposure to price movements.

The SEC's public comment period is a procedural requirement under the Securities Exchange Act of 1934, allowing interested parties to submit feedback on whether the products meet exchange listing standards and investor protection requirements. The outcome of this proposal could set a precedent for future leveraged and inverse crypto products.