SEC Greenlights Leveraged Crypto ETPs
MissedBlock Desk · · 2 min read
Updated
SEC Greenlights Six Leveraged ETPs for Bitcoin, Ether, and Commodities
The U.S. Securities and Exchange Commission (SEC) has approved a rule change by Cboe BZX that will allow for the listing and trading of six new futures-based Exchange Traded Products (ETPs). These products are designed to track three times the daily performance of Bitcoin, Ether, and four traditional commodities.
While the SEC has given the green light to these cryptocurrency-related products, investors will need to await a final registration before trading can commence.
Futures-Based Approach for Crypto ETPs
Crucially, none of the six approved funds will directly hold Bitcoin, Ether, precious metal bars, or barrels of oil. Instead, they will utilize regulated futures contracts. The Bitcoin and Ether ETPs, in particular, will track the prices of CME Group futures.
Volatility Shares Secures Approval for Triple-Leveraged Products
The approved ETPs are part of Volatility Shares’ VS Trust. This approval marks a significant development for Volatility Shares, which has previously launched the first 2x Bitcoin ETF (BITX) and 2x Ether ETF (ETHU). The latest approval paves the way for the firm to offer triple-leveraged cryptocurrency products.
The six triple-leveraged ETPs approved under Volatility Shares’ VS Trust cover Bitcoin, Ether, gold, silver, crude oil, and natural gas. These funds are structured to deliver three times the daily price movement of their underlying assets. For instance, if an asset increases by 1%, the fund could potentially rise by approximately 3%, and conversely, a 1% decrease in the asset could lead to a roughly 3% decline in the fund.
A Shift in the ETF Landscape
Bloomberg ETF analyst Eric Balchunas described the SEC’s approval as a “big win” for Volatility Shares. He also highlighted the dramatic evolution of the cryptocurrency ETF market, noting that less than three years ago, the SEC was still engaged in litigation with Grayscale over a spot Bitcoin ETF.
Trading Awaits Final Registration
Despite the SEC’s approval for listing and trading, the ETPs cannot begin trading until separate Form S-1 registration statements become fully effective. SEC staff must declare these registration statements effective before the public tickers can commence trading on brokerages. The current filings do not specify a date for when the S-1 registration will be declared effective.