SEC Clears Volatility Shares' 3x Leveraged ETF Lineup Under Cboe Rule Change

The U.S. Securities and Exchange Commission has approved a Cboe BZX Exchange rule change that paves the way for six triple-leveraged exchange-traded products from Volatility Shares, including proposed Bitcoin and Ether ETFs. In an order dated October 2, the SEC signed off on products designed to deliver three times the daily move in Bitcoin, Ether, gold, silver, crude oil and natural gas. Bloomberg ETF analyst Eric Balchunas called the approval a "big win" for Volatility Shares. The funds are expected to be organized as commodity-based trust shares under the Securities Act of 1933, rather than as conventional ETFs registered under the Investment Company Act of 1940. Cboe's generic listing standards allow certain commodity trusts to list without bespoke rule filings, but those standards exclude leveraged and inverse exposure. That carve-out is why Volatility Shares pursued a separate Cboe rule change, now approved by the SEC. The products are expected to rely on first- and second-month futures contracts, with cash and cash equivalents used as collateral. The SEC order did not provide a timeline for when trading will begin. The decision lands less than a year after the SEC raised pointed concerns about highly leveraged ETFs. In December 2025, SEC staff told Direxion it would not substantively review filings seeking more than 200% leveraged exposure until issues tied to Rule 18f-4 were addressed. That rule's value-at-risk framework generally caps leveraged and inverse funds at roughly twice the underlying exposure, with a narrow grandfathering exception. In October 2025, after Volatility Shares filed for 27 highly leveraged products, the SEC questioned whether proposed triple- and quintuple-leveraged ETFs complied with Rule 18f-4. By December, the agency had warned issuers including Direxion, ProShares, Tidal and Volatility Shares that some 3x and 5x proposals could run afoul of federal leverage limits, prompting certain withdrawals. The latest approval does not necessarily mean the SEC has dropped its broader concerns over 3x and 5x ETF structures. It does, though, underscore how regulatory form can determine which rules apply, offering a potential path to 3x exposure without directly resolving the SEC's 1940 Act-related objections. Volatility Shares already runs the 2x Bitcoin ETF (BITX) and the 2x Ether ETF (ETHU). If launched, the newly approved products could push crypto ETF leverage beyond current levels. As with any triple-leveraged strategy, returns can be highly volatile: amplified daily moves magnify gains and losses, and the effects of daily compounding can cause longer-term performance to diverge sharply from three times the underlying asset's return.