SEC approves listing rule for the first 3x bitcoin and ether funds

Triple-leveraged bitcoin and ether funds are a step closer to US brokerage accounts. On October 2 the SEC approved a rule change at the Cboe BZX exchange that clears six leveraged exchange-traded products from Volatility Shares for listing.

The six cover bitcoin, ether, gold, silver, crude oil and natural gas. Each aims to deliver three times the daily move of its underlying asset, and each uses futures to do it.

The word that matters is daily. These products reset every day, so their returns over a week or a month can differ sharply from three times the asset's move over the same period. In a market that swings up and down, the compounding works against the holder, and a leveraged fund can lose value even when the asset ends roughly where it started. Bitcoin and ether are volatile, which makes the effect larger.

The approval says something about the SEC as well. It shows a regulator willing to let retail investors take riskier crypto exposure through ordinary brokerage accounts, leaving the judgment to the buyer.

One step remains before any of this reaches the market. Trading cannot begin until a separate registration statement becomes effective, and no date has been given, according to Crypto Briefing.