On October 2 the SEC approved a rule change that lets the Cboe exchange list six funds with triple leverage. The underlying assets include Bitcoin and Ethereum, plus gold, silver, crude oil and natural gas. For crypto it is the first time a US regulator has lifted the leverage ceiling above 2x.
What exactly did the SEC allow?
The funds come from Volatility Shares, a firm that already runs 2x Bitcoin and Ethereum products in the US. Shares will trade on Cboe's BZX Exchange like ordinary stocks. Cboe's fast-track listing rules exclude products that chase a multiple of returns, so the exchange had to ask the SEC to approve each fund individually.
There is no start date. Shares cannot trade until each fund's registration statement takes effect, and the SEC order sets no deadline for that.
How is a 3x fund built?
An ETF is a basket of assets you buy and sell through a brokerage app like a share. The leveraged version adds borrowed money and derivatives to amplify the result.
- Daily target: if Bitcoin futures rise 2%, the fund aims to gain 6%. If they fall 2%, it aims to lose 6%.
- The funds hold regulated futures rather than coins, meaning contracts to buy or sell an asset at a fixed price later.
- To keep leverage at 3x, the portfolio is rebalanced every day. After gains it buys more futures, after losses it sells.
That mechanic has a side effect. The buying and selling usually lands near the close and can amplify intraday price moves. The bigger the fund, the bigger the impact.
Why does a multi-day result drift away from triple?
It all comes down to the word "daily". The 3x promise covers one day, and each new day is measured from a new base. If the price swings up and down without a clear trend, the fund slowly bleeds capital. This is called volatility decay.
The math is plain. Take $100, lose 30% and you hold $70. Gain 30% of $70 and you add only $21, so you end at $91. There is a second drag too: futures cost more as expiry approaches, and the fund has to roll into later contracts. Each roll eats a slice of the return.
"Leveraged ETFs are for trading, not investing."
- Eric Balchunas, senior ETF analyst at Bloomberg, from a post on X
Volatility Shares itself warns in its prospectus that a fund is not suitable for everyone and can lead to a total loss of the money invested. The SEC and FINRA have already issued a separate alert about this risk.
How did the regulator get from 2x to 3x?
Volatility Shares launched the first leveraged crypto fund in the US in 2023, tracking Bitcoin futures. Spot Bitcoin ETFs arrived in January 2024, after a decade of rejections.
Then a race for leverage began. In October 2025 Defiance filed for 49 funds with 3x long and short exposure, and Volatility Shares filed for 5x products. The regulator pushed back hard. In December 2025 the SEC halted review of anything above 2x and sent warning letters to nine issuers, ProShares among them. In March 2026 it asked issuers to avoid 5x.
The 2x lineup kept growing anyway. In April 2026 funds on Cardano, Stellar and Chainlink appeared, alongside existing ones on Bitcoin, Ethereum, Solana and XRP. Earlier 3x products on silver, oil and gas from other issuers have left the market. Only one 3x gold fund still trades.
What comes next?
The SEC leans on existing guardrails. Brokers must act in a retail client's best interest under Regulation Best Interest, and FINRA requires tougher sales and margin rules for such products.
The practical takeaway is short. A 3x fund is built for people who trade within a day, and holding one for weeks means paying for every wobble in price. Long-term holders are better matched with spot ETFs that simply hold the coins.
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