Cboe seeks SEC approval for first US 3x leveraged Bitcoin and Ethereum ETFs

Cboe BZX is seeking SEC approval to list the first 3x leveraged Bitcoin and Ethereum ETFs in the United States, alongside four other commodity funds. Sponsored by Volatility Shares LLC, these funds would track CME futures rather than holding spot assets. Because Cboe's generic rules exclude leveraged benchmark products, the exchange filed a Section 19(b) request for a specific exemption. The proposal comes despite massive losses in existing 2x funds, such as ETHU losing 96.15% annualized since inception, illustrating the severe risks of daily compounding and leverage.

Cboe 3x crypto ETF proposal

• ▪Cboe BZX filed a proposal with the SEC on August 10, 2026, seeking to list six Volatility Shares funds targeting three times the daily performance of Bitcoin, Ethereum, gold, silver, crude oil, and natural gas.
• ▪If approved by the SEC, the proposed Volatility Shares funds would be the first 3x leveraged Bitcoin and Ethereum ETFs in the United States.
• ▪An SEC notice dated August 14, 2026, stated that the registration statement for the proposed Volatility Shares funds was not yet effective and the shares were not authorized for trading.

SEC regulatory exemption requirement

• ▪Cboe BZX is seeking a case-specific exemption from BZX Rule 14.11(e)(4)(F), which excludes products seeking a multiple of a benchmark from listing under generic standards.
• ▪Cboe BZX is using a Section 19(b) filing to obtain SEC approval for the six proposed Volatility Shares funds to operate within its commodity-trust framework.

Existing 2x ETF performance losses

• ▪The Volatility Shares 2x Bitcoin ETF, BITX, reported a negative 29.76% quarterly NAV return and a negative 78.93% one-year return for the period ending June 30, 2026.
• ▪The Volatility Shares 2x Ethereum ETF, ETHU, reported an annualized average loss of 96.15% from its June 4, 2024 inception through June 30, 2026.

Daily leverage compounding mechanics

• ▪A hypothetical $100 million 3x leveraged fund requires an approximate $30 million gross trading adjustment to restore its target exposure after a 5% benchmark move.
• ▪Daily leverage resetting causes path-dependent returns where a hypothetical 3x leveraged fund would lose 9% over two days if its benchmark fell 10% and then rose 10%.

Fund operational structure

• ▪Volatility Shares LLC would sponsor the proposed funds as a series of the VS Trust, managing day-to-day assets as a registered commodity pool operator.
• ▪US Bancorp Fund Services would serve as transfer agent, fund accountant, and administrator, while US Bank National Association would act as custodian for the proposed funds.

CME futures-based exposure

• ▪The proposed funds would roll near-month futures positions into the following contract over five business days, moving approximately 20% of the expiring position each day.
• ▪The proposed Bitcoin and Ethereum funds would use first- and second-month futures contracts traded primarily on the CME rather than holding the underlying cryptocurrencies directly.

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