The SEC approved Cboe BZX's listing proposal for VS Trust's 3x Bitcoin ETF and 3x Ether ETF on October 2. The decision clears an exchange-rule hurdle for products sponsored by Volatility Shares that seek amplified daily crypto futures exposure. The order covers six funds, including products tied to gold, silver, crude oil and natural gas. The approval advances a proposal for which the exchange was still seeking permission in August.
The decision opens a listing path for brokerage investors seeking a higher daily leverage target. Cboe's generic commodity-trust standards exclude products that seek specified multiples of a benchmark, so these funds needed individual approval. The funds' other initial and continuing listing requirements still apply.
VS Trust's August 17 preliminary prospectus proposes BITH as the Bitcoin product's symbol and ETHK as the Ether product's symbol. The filing is marked subject to completion. The prospectus says securities cannot be sold until registration becomes effective. The October order approves the exchange's rule change but does not establish that registration is effective or trading has begun. Registration effectiveness and a first trading date remain unconfirmed as of October 4. Investors cannot treat the decision alone as confirmation that the products are available through their brokers.
The order classifies the funds as exchange-traded products structured as Commodity-Based Trust Shares, although the funds' names use the term ETF. The products do not have the investor protections associated with funds registered under the Investment Company Act of 1940.
Each crypto product seeks three times its benchmark's daily performance before fees and expenses. The benchmarks measure portfolios of first- and second-month futures contracts. The funds use futures alongside cash collateral. The reference point is therefore a futures portfolio's daily return, rather than the spot price alone. The preliminary prospectus defines a day as the interval between successive net asset value calculations. Under normal circumstances, the funds seek to rebalance daily. Each day's result compounds from a changed asset value, so the sequence of gains and losses matters over a longer holding period.
The SEC's investor bulletin warns that daily leveraged products can depart substantially from their stated multiple over weeks or months, especially in volatile markets. The prospectus warns that longer-period returns may differ in magnitude and even direction. A three-times daily objective does not promise triple Bitcoin's or Ether's cumulative return. Leverage also amplifies losses. SEC staff specifically warn that ETFs using leveraged Bitcoin-futures strategies increase volatility and can expose investors to significant, sudden losses.