Cboe seeks SEC approval for first 3x leveraged BTC and ETH ETFs in the US

Odaily News: Cboe BZX Exchange is seeking approval from the U.S. SEC to list a group of leveraged commodity ETFs, including daily leveraged products with 3x long exposure to Bitcoin and Ethereum.

According to the proposed rule change filed on Friday, Cboe plans to launch 3x Gold ETF, 3x Silver ETF, 3x Bitcoin ETF, 3x Ether ETF, 3x Crude Oil ETF, and 3x Natural Gas ETF. These funds will primarily hold CME or COMEX futures contracts and use cash and cash equivalents as collateral, aiming to achieve 3x the daily performance of the corresponding underlying assets.

Since these products do not meet the restrictions on leveraged products under the exchange's general listing standards, Cboe must obtain approval through a special rule application. Such highly leveraged funds are typically targeted at sophisticated investors for short-term tactical trading and are not suitable for long-term holding.

The filing also reveals that these funds will operate as "commodity pools" and be regulated by the CFTC, rather than as 1940 Act investment companies under SEC oversight like many traditional ETFs. Commodity pools typically pool capital from multiple investors to trade derivatives or other commodity-related instruments.