SEC Seeks Public Feedback on Cboe BZX Plan for 3x Bitcoin and Ether ETFs

The U.S. Securities and Exchange Commission has opened a public comment window on a Cboe BZX Exchange proposal that would allow the first U.S.-listed leveraged ETFs linked to three times the daily returns of Bitcoin and Ethereum. The filing, published by the SEC, covers a rule change request from Cboe BZX—Cboe's equities venue—to list six leveraged exchange-traded funds. Alongside the proposed 3x Bitcoin ETF and 3x Ethereum ETF, the package includes 3x leveraged funds tied to gold, silver, crude oil and natural gas. These products are designed to target 300% of an underlying asset's daily move, giving traders amplified exposure without holding the asset directly. The SEC's decision to solicit comments is part of the review process under the Securities Exchange Act of 1934, allowing investors, market participants and academics to weigh in on listing standards and investor-protection considerations. If ultimately approved, the 3x Bitcoin and 3x Ethereum vehicles would be the first leveraged crypto ETFs available on U.S. exchanges. Leveraged ETFs are widely used in traditional markets, but their expansion into crypto could change how both retail and institutional investors access digital-asset exposure, potentially boosting participation and liquidity. The structure also comes with elevated risk. Because leveraged ETFs rebalance daily, compounding effects can cause returns over longer holding periods to diverge sharply from three times the underlying asset's cumulative performance, including the potential for unexpected losses. Regulators are expected to focus on those dynamics, the volatility of the underlying markets, and whether the sponsor can manage the strategy effectively. The review arrives as the SEC continues to shape its approach to digital assets. Approvals of spot Bitcoin and spot Ethereum ETFs have opened the door to more complex offerings, though the agency has historically taken a more cautious stance toward leveraged and derivatives-based products. The comment process is likely to draw strong views on both sides of the debate over crypto's place in regulated markets. For investors, the decision could set an important benchmark for future leveraged and inverse crypto products, and may indicate whether the SEC is willing to move beyond plain-vanilla ETFs in ways that could influence product innovation and investor choice over time. FAQs Q1: What is a 3x leveraged ETF? A 3x leveraged ETF seeks to deliver three times the daily percentage change of its benchmark. If Bitcoin rises 1% in a session, the fund targets a 3% gain that day. Due to daily rebalancing, results over longer periods can differ significantly from three times the asset's cumulative return. Q2: How would these differ from spot Bitcoin ETFs? Spot Bitcoin ETFs hold Bitcoin and aim to track its price directly. Leveraged ETFs generally use derivatives and swaps to magnify daily returns and are typically designed for short-term trading rather than long-term buy-and-hold exposure. Q3: What is the SEC's public comment process? The SEC publishes a proposed rule change and invites public input for a set period, commonly around 21 days after the proposal appears in the Federal Register. The agency reviews submitted comments before deciding to approve, disapprove, or extend the review timeline. Disclaimer: This information is not trading advice. Bitcoinworld.co.in assumes no liability for investment decisions made based on this content. Conduct independent research and/or consult a qualified professional before investing. Related Reading - Spot Bitcoin ETFs Log $606M Inflows, Extending Winning Streak to Four Sessions - Arthur Hayes: Spot Bitcoin ETFs Beat Strategy Stock for Bitcoin Exposure - Franklin Templeton to Integrate Tokenized Assets into Existing Funds, SEC Filings Show - BlackRock's Spot Ethereum ETF Acquires $120M in ETH, Largest Purchase in Seven Months - SEC Crypto Innovation Exemption Could Arrive in Early October, Securitize President Says