U.S. approves listing of 3x leveraged products tied to bitcoin, ether and commodities
Key Facts
The U.S. Securities and Exchange Commission on October 2, 2026, approved a rule change allowing Cboe BZX Exchange to list and trade shares of V-Squared products, in a move covering products tied to bitcoin, ether and other commodities. The two cryptocurrency products target daily returns equal to three times the performance of their respective benchmark futures indexes, before fees and expenses. But the decision concerns approval of a listing rule change and does not set a date for trading to begin. The approval alone therefore does not mean investors can already buy the funds. The registration statement must become effective before sales can begin, according to the filing with the SEC.
The products covered extend beyond bitcoin and ether; the rule change proposal filed by Cboe BZX Exchange on August 10, 2026, also concerns listing products tied to gold, silver, oil and gas. That places the approval within a broader framework for leveraged commodity products on the exchange, rather than limiting it to cryptocurrencies. The exchange filed the proposal with the SEC on that date, before the approval decision on October 2. The SEC received no comments on the proposal, according to the decision document. The breadth of the products means the regulatory approval addressed a listing rule for a category of products, not the immediate launch of every fund.
The exposure mechanism is based on a specified portfolio of front-month and second-month futures contracts, with contracts, cash and cash equivalents used as collateral or margin. For the bitcoin fund, the registration statement says its daily objective is to achieve investment results, before fees and expenses, equal to three times the benchmark bitcoin futures index. The multiplier applies to the index's daily performance and does not describe a fixed return over longer periods. The fund's benchmark is also futures contracts, not the cryptocurrency's spot price directly. This structure defines the product as leveraged daily exposure based on derivatives.
The SEC says that, despite the word “exchange-traded fund” in their names, the products are shares of commodity trusts and are classified as exchange-traded products. This classification places them in a category distinct from traditional funds that the term “exchange-traded fund” in the name might suggest. The SEC's decision concerns a change to a rule allowing Cboe BZX Exchange to list and trade the shares, and does not by itself establish that the registration steps required for sales are complete. An amended registration document filed on October 7 stated that the proposed sale would begin after the registration statement became effective. The statement's effectiveness therefore remains a subsequent condition before the products can be treated as offered for sale.
The bitcoin fund disclosure warns that leverage magnifies gains and losses, and that a steep fall in bitcoin's price in a single day could result in the loss of a substantial part or all of the investment. The SEC also said broker recommendations to retail customers are subject to best-interest requirements. The document said the Financial Industry Regulatory Authority imposes enhanced requirements on sales practices and customer margin for inverse and leveraged securities. In the broader regulatory framework, Rule 18f-4 allows regulated funds to use derivatives, including futures, subject to conditions intended to address speculative risks and asset sufficiency. These requirements provide regulatory context for the use of derivatives, while disclosure of amplified losses remains a core part of the product description.
An earlier registration document showed that the funds in question, which included gold, silver, bitcoin, ether, oil and gas, had not begun operations or investment activities and had not issued shares when the disclosure was prepared. An amendment to the registration statement filed on October 7 then specified that the proposed sale would begin after the statement became effective, making effectiveness a decisive step in the timeline. In market moves, a report published by Investing.com citing Reuters on October 4 said bitcoin rose 0.44% to $85,386 at 01:30 Eastern time, as investors followed the regulatory development. The report said the cryptocurrency remained in a narrow range after briefly topping $87,000 earlier that week. In later closing data, bitcoin stood at $80,186.94 on October 25, compared with $81,189.43 on October 23, while ether closed at $2,345.51 versus $2,387.60 on the same dates, respectively. The next step toward sales of the products remains tied to the registration statement becoming effective, while the listing rule approval sets no date for trading to begin.