SEC Approves Cboe Listing Rule for Volatility Shares' 3x Bitcoin and Ether Products, but Trading Awaits Registration

The Securities and Exchange Commission on Oct. 2 approved a rule change that lets Cboe BZX Exchange list six triple-leveraged products from Volatility Shares. Two are crypto funds: a 3x Bitcoin ETF and a 3x Ether ETF. The other four track gold, silver, crude oil and natural gas.

You still can't buy any of them. Trading can't start until the SEC declares each fund's Form S-1 registration statement effective, and the agency has set no timeline for that review. No launch date has been announced.

What the SEC actually approved

The order is Release No. 34-106577, covering File No. SR-CboeBZX-2026-065. Cboe filed the proposal Aug. 10, the SEC published notice Aug. 14, and approval came Oct. 2. The order says no public comments were received. The SEC's Division of Trading and Markets approved it under delegated authority.

The proposed tickers are BITH for the Bitcoin fund and ETHK for the Ether fund. All six products sit inside the VS Trust, which Volatility Shares sponsors.

Each fund targets three times the daily move of its futures benchmark, before fees and expenses. None will hold spot Bitcoin or Ether. They will hold first- and second-month futures, with cash and cash equivalents as collateral. The crypto products are expected to track CME Group futures.

The structure is the story

Despite "ETF" in the names, the SEC order classifies these as commodity-based trust shares registered under the Securities Act of 1933. They are not funds under the Investment Company Act of 1940.

The distinction matters for Rule 18f-4. It caps a fund's value-at-risk at twice that of an unleveraged reference portfolio, which effectively limits 1940 Act leveraged funds to about 2x.

Cboe's generic listing standards for commodity trusts exclude products that target a multiple or inverse of a benchmark. Cboe therefore needed a product-specific rule, which the SEC has now approved.

The regulatory backdrop is recent. In October 2025, after Volatility Shares filed for 27 highly leveraged products, the SEC questioned whether proposed 3x and 5x funds complied with Rule 18f-4. On Dec. 2, 2025, SEC Division of Investment Management staff told Direxion they would not substantively review its filings for funds seeking more than 200% exposure until the firm resolved those concerns. Those filings included proposed 3x Bitcoin and Ether funds. Some issuers withdrew proposals.

The October approval does not reverse any of that. It applies to a different legal wrapper, so the 1940 Act question never comes up.

Bloomberg ETF analyst Eric Balchunas wrote on X that the approval was a "big win for VolatilityShares."

The cost of daily resets

These funds reset leverage every day. Over one day, a 10% gain in the benchmark should produce roughly a 30% gain in the fund. Over longer stretches, returns can drift far from three times the underlying asset's performance.

Volatility Shares' own prospectus gives the example. A coin rises 10%, then falls about 9.1%, which leaves a spot holder at breakeven. The 3x fund holder ends up down about 5.5%.

The company's existing 2x Bitcoin fund, BITX, shows the drag in practice. It lost 61.9% in the 12 months ending Oct. 21, while Bitcoin fell 25.1% over the same stretch, according to Motley Fool's analysis. BITX manages more than $1.2 billion.

The prospectus lists a 1.85% annual management fee for the Bitcoin fund. It estimates the Bitcoin and Ether funds must earn 1.98% and 2.78% a year to break even.

The Motley Fool's analysis argues that these products are built for hedge funds and institutions running complex hedged trades, and that "most people should not buy them." It recommends spot holdings or spot ETFs for patient investors instead.

The order itself puts guardrails around sales. Broker-dealers recommending the funds remain bound by Regulation Best Interest and by FINRA's stricter sales-practice and margin requirements for leveraged securities. The order also notes the funds lack certain protections tied to Investment Company Act registration.

Market context

Bitcoin traded near $85,000 to $86,000 in early October after a strong third quarter, and Ether was back above $2,700 around the time of the approval. Spot Bitcoin ETFs hold roughly $109 billion in net assets, with cumulative net inflows near $57.6 billion since launch.

Volatility Shares already offers 2x products on both assets: BITX for Bitcoin and ETHU for Ether.

What comes next

The remaining gate is the S-1 review. The SEC has not said when it will act on the registration statements for BITH and ETHK, and Volatility Shares has not announced a launch date. Whether the SEC lets a 3x crypto product reach investors through the 1933 Act route, while its 1940 Act leverage concerns remain on the books, will be settled by that decision.