SEC clears six 3x funds, but crypto trading awaits filings

The U.S. Securities and Exchange Commission approved a Cboe BZX rule change on October 2 that clears the way for Volatility Shares to list six funds targeting three times the daily returns of Bitcoin, Ether, gold, silver, crude oil and natural gas. The Bitcoin and Ether products are not yet trading and cannot begin until their Form S-1 registration statements become effective, a step for which no date has been announced. The funds are designed to use regulated futures rather than hold Bitcoin or Ether directly. They would reset their leverage daily, aiming to deliver about three times the underlying futures’ return for each trading day, before fees and expenses. The approval concerns the exchange’s listing rule; it does not itself authorize the funds to begin trading. Daily leverage targets do not apply over longer periods. Because gains and losses compound as exposure is reset, a fund’s return over several days can differ substantially from three times the asset’s overall move. A preliminary prospectus cited in reporting warns that greater benchmark volatility can increase volatility decay and says the 3x Bitcoin fund may be speculative and unsuitable for some investors.