Cboe BZX Exchange has officially filed with the United States Securities and Exchange Commission (SEC) to gain approval for six new 3x-leveraged commodity exchange-traded funds (ETFs), including products tied to Bitcoin and Ether. The proposed ETFs also cover gold, silver, crude oil, and natural gas, aiming to offer investors triple-leveraged daily exposure to these key commodities and digital assets.
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AAPLSix triple-leveraged ETFs proposed
According to a filing submitted Friday, Cboe plans to introduce six separate ETFs: 3x Gold, 3x Silver, 3x Bitcoin, 3x Ether, 3x Crude Oil, and 3x Natural Gas. These funds are designed to provide returns equal to three times the daily performance of their respective underlying benchmarks. However, due to the nature of leverage, investors could see both gains and losses magnified by a factor of three as prices fluctuate.
Such highly leveraged instruments are generally intended for active trading rather than long-term investment, as performance can deviate from simple ownership of the underlying asset over extended periods. Market participants typically monitor their positions closely due to the volatile nature of triple-leveraged daily returns.
| ETF Type | Underlying Asset | Leverage |
|---|---|---|
| 3x Gold ETF | Gold | 3x |
| 3x Silver ETF | Silver | 3x |
| 3x Bitcoin ETF | Bitcoin | 3x |
| 3x Ether ETF | Ether | 3x |
| 3x Crude Oil ETF | Crude Oil | 3x |
| 3x Natural Gas ETF | Natural Gas | 3x |
Unique listing process and regulatory structure
The proposed funds will be structured as commodity pools rather than as registered investment companies under the Investment Company Act of 1940. As commodity pools, the ETFs would also fall under the oversight of the Commodity Futures Trading Commission (CFTC), reflecting the futures-based design of each fund.
Due to their triple-leverage feature, these ETFs do not meet Cboe’s standard listing requirements, so the exchange has initiated a special SEC approval process. In addition, Cboe intends to file a Form S-1 registration under the Securities Act of 1933 to facilitate the listing and trading of these funds if approved.
Portfolio adjustments may occur based on market conditions and investor activity, allowing the funds to remain aligned with their stated daily investment objectives.
For the two crypto-based ETFs, the portfolios will use CME futures contracts for exposure to Bitcoin and Ether rather than holding the digital assets directly.
This futures-based approach introduces an additional regulatory layer compared to physically-backed, spot commodity ETFs.
Mini dictionary: Commodity pool – A commodity pool is a fund combining the capital of multiple investors to trade futures, options, or swaps on commodities. These pools are managed by commodity pool operators and are subject to CFTC regulations.
Triple-leveraged crypto ETFs could reshape US market
Volatility Shares LLC, a company known for its leveraged crypto asset ETFs, has been named as the sponsor for the proposed 3x products. Volatility Shares currently offers 2x Bitcoin and 2x Ether ETFs through its VS Trust platform in the United States, providing background in the leveraged exchange-traded product sector.
If approved, the 3x ETFs would provide US investors with exchange-listed access to three times the daily returns of Bitcoin and Ether, expanding the American leveraged crypto product landscape.
The potential risks are considerable, as triple leverage means that even minor market moves can result in significant profit or loss. These products are considered suitable for experienced investors who are comfortable with high-risk, high-reward strategies.
While similar 3x-leveraged crypto ETFs already feature in European markets, most leveraged crypto products available to US investors carry lower risk profiles and lesser degrees of leverage. Market observers now await a decision by the SEC, which will determine whether these high-geared vehicles will be permitted for trading in the United States.
