Inside Cboe’s first 3x Bitcoin and Ether ETF filing and what comes next

Institutional demand across the crypto market has weakened, leaving investors hesitant and exchange-traded fund flows under pressure.

Despite these conditions, more ETF products are preparing to enter the market.

The SEC reported that Cboe BZX Exchange had filed a proposed rule change covering two Volatility Shares funds. These products included a 3x Bitcoin ETF and a 3x Ether ETF.

Could 3x Bitcoin and Ether ETFs launch?

According to the SEC filing, Cboe BZX Exchange sought approval to list several leveraged commodity-based funds.

The proposed lineup included 3x Bitcoin and Ether ETFs. It also covered products tracking gold, silver, and crude oil. If approved, the crypto funds could become America’s first triple-leveraged Bitcoin and Ethereum ETFs.

Both funds would primarily use CME Bitcoin and Ethereum futures. They would target three times their assets’ daily performance.

However, that leverage would reset daily. Returns over longer periods may differ significantly from three times the assets’ cumulative performance.

The funds would operate as commodity pools under the Commodity Futures Trading Commission’s framework.

Even so, Cboe’s proposed listing rule change still required SEC approval. Volatility Shares LLC would sponsor the funds, which would become a series of the VS Trust.

For Volatility Shares, leveraged crypto ETFs were familiar territory. The company already offered 2x Bitcoin and Ether ETFs.

Can 3x crypto ETFs revive demand?

Cboe’s filing arrived as Bitcoin ETF demand weakened and selling pressure intensified. According to SoSoValue, Bitcoin Spot ETFs recorded three consecutive days of Net Outflows.

In fact, Whale Insider reported $389.7 million in weekly Bitcoin ETF selling.

On the 14th of August, Bitwise’s BITB recorded $6 million in Net Inflows. However, total Bitcoin ETF Net Outflows reached $57 million. Ethereum [ETH] ETF flows painted a different picture. These funds recorded Net Inflows during two of the previous three days.

Ethereum ETFs attracted $14 million in combined Net Inflows during that period. Still, earlier Net Outflows outweighed those recent additions.

Overall, Bitcoin [BTC] and Ethereum ETF flows remained under pressure. The filing introduced more leverage into the market. Whether investors currently want more exposure remains the bigger question.

Final Summary

• Cboe filed to list Volatility Shares’ proposed 3x Bitcoin and Ether ETFs. The funds would target three times Bitcoin’s and Ether’s daily performance through CME futures.
• Bitcoin Spot ETFs recorded three consecutive days of Net Outflows.