SEC approves a 3x fix for bitcoin and ether traders who miss the wild swings
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
On October 2, 2026, the U.S. Securities and Exchange Commission (SEC) approved a Cboe BZX rule change allowing six new ETFs issued by Volatility Shares that aim to deliver three times (3x) the daily return of underlying assets including bitcoin and ether. These are the first crypto-related funds in the U.S. permitted to use 3x leverage, an increase from the previous 2x cap. The ETFs will hold regulated futures on bitcoin and ether, not the actual tokens.
Why it matters
The approval marks a significant milestone as it aligns crypto investment products more closely with traditional asset leverage offerings. It provides traders with a powerful tool for short-term speculation but carries risks such as volatility decay and daily rebalancing effects that can negatively impact longer-term returns. The SEC permit signals growing acceptance of sophisticated crypto derivatives in the market.
Key context
Previously, U.S. crypto funds were limited to 2x leverage, and these are the first to break that limit with 3x leverage. Leveraged ETFs must rebalance daily to maintain their leverage, amplifying price swings and potentially causing returns to diverge from three times the asset’s performance over multiple days. Futures-based ETFs incur costs from contract rollovers, similar to earlier bitcoin futures ETFs launched in 2021. Industry experts caution that such funds are more suited for active traders rather than long-term investors.
Key numbers and entities
The SEC, Cboe BZX exchange, Volatility Shares (issuer), bitcoin (BTC) priced at $86,028.63 at one point, and ether are central entities. Volatility Shares is issuing six ETFs covering bitcoin, ether, gold, silver, crude oil, and natural gas. Bloomberg Senior ETF Analyst Eric Balchunas and Blockstream CEO Adam Back provided commentary on the risks.
What remains unclear
The exact launch date for these ETFs remains uncertain since Volatility Shares still requires SEC approval for its registration statement with no deadline set. The long-term impact on market volatility or investor behavior from these products is not detailed in the source. Further specifics on fund size limits or investor protections are also not provided.