# SEC Approves the First 3x Leveraged Bitcoin and Ether ETFs

**By Hasan Şentürk** · Published October 5, 2026



The Securities and Exchange Commission approved six leveraged commodity products on October 2, 2026, including the first two US funds built to target three times the daily move of bitcoin and ether futures. The funds sit in the VS Trust and carry the names 3x Bitcoin ETF and 3x Ether ETF, alongside four products tied to gold, silver, crude oil, and natural gas.

The approval changes what can be listed and traded, not what those funds will do. Each one aims for three times the daily return of a futures benchmark, before fees, and that daily target is the detail most investors miss. A fund named for 3x upside carries a matching 3x downside, and it resets every day.

## Six leveraged funds cleared by the SEC

The decision arrived as Release No. 34-106577, built on a Cboe BZX Exchange rule filing. The exchange filed SR-CboeBZX-2026-065 on August 10, 2026, the SEC published it for comment on August 19, and no comments came in before approval on October 2.

All six funds are series of the VS Trust, sponsored by Volatility Shares LLC. Each targets three times the daily performance of one reference commodity, tracked through first and second month futures contracts plus cash held as collateral and margin.

- 3x Bitcoin ETF, tied to bitcoin futures
- 3x Ether ETF, tied to ether futures
- 3x Gold ETF, tied to gold futures
- 3x Silver ETF, tied to silver futures
- 3x Crude Oil ETF, tied to crude oil futures
- 3x Natural Gas ETF, tied to natural gas futures

The bitcoin and ether funds are the ones crypto investors will watch. The order does not set a launch date. It clears listing, and the offering still has to clear registration.

## How does a daily reset target work?

A 3x fund does not triple your return over a year. It triples the benchmark's move from one day's close to the next. If the benchmark rises 1% on Tuesday, the fund targets 3% for Tuesday. If the benchmark falls 1%, the fund targets a 3% loss. Every figure is before fees and expenses.

To hold near three times, the fund rebalances at the close of each day, adding or trimming futures exposure so the next session starts fresh at 3x. Exposure comes from futures contracts rather than from owning bitcoin or ether directly, with cash posted as collateral.

The SEC's own [investor bulletin on leveraged and inverse ETFs](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/sec) states the problem plainly. Performance over a period longer than one day can differ significantly from the stated daily objective, and the gap can widen in volatile markets. The same bulletin notes that daily resets can create short term capital gains, which our [crypto tax guide](https://financetrekker.com/crypto-tax-guide/) covers in more detail.

## The quiet cost of daily rebalancing

Volatility creates a drag that simple multiplication hides. Take a benchmark that gains 10% on day one and slips back the next, ending where it began. A 3x fund does not end where it began either.

| Day | Benchmark Move | 3x Fund Move | Benchmark Value | 3x Fund Value |
|---|---|---|---|---|
| Start | - | - | $100.00 | $100.00 |
| Day 1 | +10.0% | +30.0% | $110.00 | $130.00 |
| Day 2 | -9.1% | -27.3% | $100.00 | $94.55 |
| Two Days | 0.0% | -5.5% | $100.00 | $94.55 |

The benchmark round-tripped to zero while the 3x fund lost about 5.5%, because the second day's triple loss applied to a larger base than the first day's gain. Three times the daily move is not three times the move over time.

The order points the same way. It notes that higher leverage and volatility may widen the divergence from the daily target. A rolling schedule that moves futures from expiring contracts into later months adds a second layer to track.

## Why is the ETF label misleading?

Each product carries ETF in its name, but the order describes them as commodity-based trust shares under BZX Rule 14.11(e)(4). In practice they are exchange-traded products registered under the Securities Act of 1933, not investment companies under the Investment Company Act of 1940.

That distinction has teeth. The 1940 Act brings limits on concentration and other protections that apply to ordinary ETFs and mutual funds. A commodity-based trust does not follow the same rulebook. It holds futures and collateral, and its value tracks a benchmark rather than a diversified portfolio.

The funds also needed a rule filing of their own. BZX's generic listing standards exclude leveraged commodity trusts, so each one had to pass individual review instead of sliding into a standard slot. The order adds that broker recommendations still fall under conduct rules, and a firm needs a reasonable basis to believe a customer can evaluate the risks.

## How does the danger multiply?

Three times a daily drop is punishing. A single day benchmark decline of 33% would target a loss near 99% in the fund, and crypto futures have shown they can move hard inside a session.

The Commodity Futures Trading Commission has [warned that leverage amplifies the underlying risk](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/understand_risks_of_virtual_currency.html). When prices move against a leveraged position, an account can be forced to add money or be closed out.

The SEC bulletin is blunt about the audience. These products generally are not suitable for buy-and-hold investors, and a holder can still lose a large amount even when the benchmark's longer term record looks fine. There is also no guarantee a fund hits its 3x target on any given day. Costs, tracking error, and market conditions can pull the return away from the stated multiple.

## What has to happen before trading starts?

The order clears listing and trading on Cboe BZX. It does not complete the offering. Each fund still needs an effective registration statement before its shares can trade, a step the sponsor handles on its own timeline.

The conditions continue after that gate. Each fund must have at least 100,000 shares outstanding when trading begins. The sponsor computes net asset value per share every day, and the exchange can halt trading if the daily valuation is not available to everyone at the same time.

The practical read is narrow. The approval is a green light for the structure, not a page you can buy from today. Investors will hear from the sponsor when registration clears and the shares actually list.

## Who should skip these products?

Daily-reset leverage fits short holding periods. An investor who wants a longer term stake in bitcoin may find a plain fund easier to reason about, because its path is not reset each afternoon. Our breakdown of [bitcoin ETF flows](https://financetrekker.com/bitcoin-etf-august-2026-inflows-what-it-means/) shows how those funds behave over a month.

Anyone who cannot watch a position daily, or who would be hurt by a sharp intraday swing, has little reason to use a 3x product. Fees and expenses subtract from the result on every day the fund rebalances.

Compare the wrapper before the ticker. [Index funds versus ETFs](https://financetrekker.com/index-funds-vs-etfs/) explains how fund structures differ, and our guide on [crypto custody](https://financetrekker.com/are-crypto-exchanges-safe/) covers where coins actually sit once you own them.

None of this is a reason to buy or avoid a fund. It is a reason to read the daily target line before the name.

## Filings and official reading

- [SEC order granting approval, Release No. 34-106577](https://www.sec.gov/files/rules/sro/cboebzx/2026/34-106577.pdf)
- [SEC investor bulletin on leveraged and inverse ETFs](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-alerts/sec)
- [SEC investor bulletin on exchange-traded funds](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-24)
- [CFTC customer advisory on virtual currency trading risks](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/understand_risks_of_virtual_currency.html)

Each item above is a primary or official source rather than a summary of one.

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Source: https://financetrekker.com/3x-leveraged-bitcoin-ether-etfs-explained/