Cboe Tests SEC Limits With New 3x Bitcoin and Ethereum ETFs
Cboe BZX Exchange has formally moved its proposed 3x Bitcoin and Ether ETFs into the SEC review process, asking the regulator to permit a new class of leveraged crypto products designed to deliver three times the daily performance of their underlying markets.
Summary:
- Cboe wants to list 3x Bitcoin and Ethereum ETFs alongside four leveraged commodity funds.
- The funds would target three times the daily performance of their reference assets.
- Bitcoin and Ether exposure would primarily come through regulated futures contracts.
- The SEC has opened the proposal for public comment, but has not approved the products.
The SEC published Cboe’s proposal on August 14 under file SR-CboeBZX-2026-065, covering six funds tied to BTC, ETH, gold, silver, crude oil and natural gas. The filing matters because 3x exposure falls outside Cboe’s existing generic listing standards, forcing the exchange to make a specific regulatory case for why the products should trade.
Cboe wants the SEC to treat six leveraged funds under one framework
The proposal covers six series of VS Trust:
- 3x Bitcoin ETF
- 3x Ether ETF
- 3x Gold ETF
- 3x Silver ETF
- 3x Crude Oil ETF
- 3x Natural Gas ETF
Each fund would seek investment results equal to approximately three times the daily performance of its reference commodity, before fees and expenses.
That wording is crucial. These are not products designed to return three times Bitcoin’s, Ethereum’s or gold’s performance over a month or year. The leverage target resets every trading day.
The filing also places BTC and ETH in the same proposed structure as four established commodity markets. Rather than seeking a crypto-specific listing framework, Cboe is applying its Commodity-Based Trust Shares rules across all six funds.
That gives the filing broader significance than a request for another pair of crypto ETFs. It tests whether regulated crypto derivatives have matured enough for the SEC to permit the same 3x exchange-traded structure proposed for gold, oil and other conventional commodities.
How the 3x Bitcoin and Ethereum ETFs would actually work
The funds would generate leverage primarily through derivatives rather than buying three dollars of the underlying asset for every dollar invested.
According to the SEC notice, each fund would invest at least 80% of its net assets, plus borrowings for investment purposes, in Commodity-Based Assets linked to its reference commodity. Those assets include futures contracts and other eligible commodity-linked instruments.
For Bitcoin and Ether, the relevant futures would trade on the Chicago Mercantile Exchange, a designated contract market regulated by the Commodity Futures Trading Commission.
The remaining portfolio could include cash, cash equivalents, U.S. government securities, money-market funds and other instruments used to manage collateral and liquidity.
The result is a derivatives-driven strategy whose exposure must be actively adjusted.
If Bitcoin gains 4% in a trading session, the Bitcoin fund would target approximately 12% before fees and tracking differences. A 4% decline would imply a target loss of roughly 12%.
But that relationship resets the following day.
Daily resetting makes holding period more important than the 3x label
The largest practical risk comes from compounding.
Consider Bitcoin starting at 100. If it rises 10% on the first day, it reaches 110. A theoretical 3x fund would rise 30%, taking its value from 100 to 130.
If Bitcoin then falls 9.09%, it returns to 100.
The leveraged ETF, however, would target a 27.27% decline on the second day because its exposure has reset from the new base. Its value would fall from 130 to approximately 94.55.
Bitcoin would be flat across the two sessions, while the theoretical 3x ETF would have lost roughly 5.5%.
That gap becomes particularly relevant for BTC and ETH because both can experience large moves in opposite directions over relatively short periods.
The proposed funds are therefore better understood as tools for obtaining amplified daily exposure, rather than simple leveraged substitutes for holding spot Bitcoin or Ethereum.
Why Cboe needs specific SEC approval
The regulatory obstacle is unusually clear in the official SEC notice.
Cboe’s generic listing standards permit certain Commodity-Based Trust Shares, including actively managed products and products involving digital commodities. The SEC approved amendments to those standards in July 2026.
The problem is leverage.
The proposed funds would not satisfy the generic standards because they seek 3x daily performance, requiring Cboe to submit a separate proposed rule change under Section 19(b)(1) of the Securities Exchange Act.
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That distinction matters for interpreting the August 14 publication. The SEC has not approved 3x Bitcoin or Ethereum ETFs. It has formally published Cboe’s proposal and opened the regulatory review process.
Cboe originally submitted the filing on August 10, 2026.
Cboe’s strongest argument rests on regulated futures markets
Cboe’s case is built heavily around where the underlying derivatives trade.
The exchange argues that the reference futures markets for the six commodities are regulated designated contract markets and members of the Intermarket Surveillance Group, or are subject to comprehensive surveillance-sharing arrangements.
That surveillance framework matters because one of the SEC’s longstanding concerns with exchange-traded crypto products has been whether exchanges can detect and investigate manipulation in the markets driving their prices.
Bitcoin and Ether now have established CME futures markets. Cboe is effectively arguing that increasing an ETF’s daily exposure from a lower leverage ratio to 3x does not remove the surveillance protections already attached to those regulated futures.
The SEC still has to consider a separate issue: whether the additional leverage itself introduces risks that warrant different treatment.
Futures create costs that spot Bitcoin investors do not face
Even if a 3x Bitcoin ETF perfectly maintains its daily leverage target, its longer-term return can diverge from Bitcoin for reasons beyond compounding.
Futures prices do not always match spot prices. Contracts must eventually be rolled, and the cost of replacing expiring futures with later-dated contracts can either help or hurt performance depending on the shape of the futures curve.
A leveraged strategy magnifies the importance of those mechanics because it requires substantially more derivatives exposure relative to the fund’s net assets.
Investors would therefore face several potential sources of divergence:
- Daily leverage resets and compounding
- Futures roll and financing costs
- Management fees and operating expenses
- Tracking differences between futures and spot markets
The ETF wrapper may make leveraged Bitcoin or Ether exposure easier to access through conventional brokerage accounts, but it does not make the exposure economically equivalent to holding three times as much spot crypto.
What changes next in the SEC review
Publication of the notice starts the formal comment process. Under the SEC notice, interested parties may submit views on whether Cboe’s proposed rule change is consistent with the Securities Exchange Act and the requirements governing national securities exchanges.
The Commission can ultimately approve or disapprove the proposal, or institute proceedings that extend its consideration. Until that process is completed, the six funds cannot be treated as authorized for listing.
The regulatory decision could have consequences beyond Bitcoin and Ether. Cboe has deliberately bundled crypto with gold, silver, oil and natural gas under the same 3x structure, putting the SEC in a position to assess leveraged digital-asset products within a broader commodity ETF framework.
For the market, the next concrete signal will come from the SEC docket: public comments, any amendments from Cboe and whether the Commission decides that the surveillance and investor-protection arguments are sufficient for 3x daily exposure.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Zdravkov
Reporter at CoinsPress
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
