Bitcoin, Ether, Oil, Gold: Volatility Shares Cracks the SEC Code to Bring 3x ETFs Back

The U.S. Securities and Exchange Commission (SEC) has approved a Cboe BZX Exchange rule change that clears the way for six triple-leveraged exchange-traded products from Volatility Shares, including proposed 3x Bitcoin and Ether ETFs. The Oct. 2 order covers six products targeting three times the daily move in Bitcoin, Ether, gold, silver, crude oil and natural gas. Bloomberg ETF analyst Eric Balchunas called the decision a "big win" for Volatility Shares. The approval is notable because it comes less than a year after the SEC raised serious concerns about highly leveraged ETFs. A Regulatory Workaround for 3x ETFs The new products will be structured as commodity-based trust shares under the Securities Act of 1933, rather than conventional ETFs registered under the Investment Company Act of 1940. That distinction is crucial. Cboe’s existing generic listing standards allow certain commodity trusts to list without individual rule changes, but exclude products seeking leveraged or inverse exposure. Volatility Shares therefore needed a separate Cboe rule change, which the SEC has now approved. The funds are expected to use first- and second-month futures contracts, with cash and cash equivalents serving as collateral. The SEC order does not specify when trading will begin. Why the Decision Matters The approval appears to carve out a path for 3x exposure without directly resolving the SEC’s concerns over 1940 Act funds. In December 2025, SEC staff told Direxion it would not substantively review filings seeking more than 200% leveraged exposure until concerns under Rule 18f-4 were addressed. The rule’s VaR framework generally limits leveraged/inverse funds to about 2x exposure, subject to a narrow grandfathering exception. That followed a broader regulatory chill. In October 2025, the SEC questioned whether proposed 3x and 5x ETFs complied with Rule 18f-4 after Volatility Shares filed for 27 highly leveraged products. By December, the SEC had warned issuers including Direxion, ProShares, Tidal and Volatility Shares that certain 3x and 5x proposals could violate federal leverage limits, prompting some withdrawals. The latest approval therefore does not necessarily signal that the SEC has abandoned its concerns about 3x and 5x leverage. Instead, it highlights how the regulatory structure of a product can determine which rules apply. Volatility Shares already offers 2x Bitcoin and Ether ETFs, 2x Bitcoin ETF (BATS:BITX) and 2x Ether ETF (BATS:ETHU), while the new approval could push crypto ETF leverage into previously unexplored territory. For investors, however, the basic risk still holds. 3x daily exposure magnifies both gains and losses, while daily compounding can cause longer-term returns to diverge sharply from three times the underlying asset’s performance. Read Also: Bitcoin Is Headed Straight to $100,000, Analyst Says: 'I'm Long As Hell' Photo: Shutterstock