SEC Clears the First 3x Bitcoin Product, but Sales Have Not Started

The first U.S. exchange product that triples bitcoin's daily move won approval on Friday.

Nobody can buy it yet.

What the SEC approved is an exchange listing rule, not a sale. There is a second door, and it is still shut.

What Was Approved Is a Listing Rule

The order is Release No. 34-106577, file number SR-CboeBZX-2026-065. Cboe BZX filed the proposal on August 10. It was published in the Federal Register on August 19, and approval came on October 2.

Six products are covered: 3x Bitcoin, 3x Ether, 3x Gold, 3x Silver, 3x Crude Oil and 3x Natural Gas. All sit under Volatility Shares' VS Trust. Crypto outlets report the tickers BITH for bitcoin and ETHK for ether.

The order says the products may list on the exchange. Before sales can start, each product's S-1 registration under the Securities Act of 1933 must separately become effective.

So there is an official action, but it does not start trading. The SEC gave no date for the second step.

This Is Not a Crypto Story

The headlines read the order as bitcoin news.

The real news is a legal structure.

An ordinary U.S. fund falls under the Investment Company Act of 1940. That law's Rule 18f-4, adopted in 2020, caps a fund's derivatives risk at 200% of the value-at-risk (VaR) of its reference portfolio. In practice, new leveraged funds top out at 2x.

That is why Volatility Shares' 2x bitcoin fund BITX is 2x. Older funds such as TQQQ, which triples the Nasdaq, predate the rule.

The new products were not set up as funds. The SEC classifies them as "Commodity-Based Trust Shares." In the order's own words, these products "are not regulated under the 1940 Act."

According to reports, they are commodity pools overseen by the CFTC and the NFA. They do not hold bitcoin or gold. They use first- and second-month futures contracts plus cash collateral.

The Math of 3x

The key word in "3x daily" is "daily." The product resets its leverage at every close. Over more than one day, the result drifts away from 3x.

The lesson is about volatility, not direction. Even if bitcoin goes nowhere, the 3x product loses value. This is called volatility decay.

In March 2020, bitcoin lost more than a third of its value in a single day. A product like this would have been wiped out in one session.

Below are the last six months of a spot bitcoin fund. The chart makes no call on direction; it shows the volatility a 3x product would be built on.

How the SEC Weighed the Risks

The order rests on sales rules, not on the product itself. The SEC wrote that broker recommendation rules apply. It added that FINRA imposes stricter sales-practice and margin requirements for leveraged products.

Under the order, a broker must reasonably believe the customer has the knowledge and experience to evaluate these risks. The exchange's surveillance-sharing agreement with futures exchanges is also part of the rationale.

One more detail: "The Commission has received no comments on the Proposal."

No investor group and no rival filed an objection on the record.

Who Will Buy

According to reports, about 67 3x or inverse 3x products tied to stocks and commodities already trade on U.S. exchanges. What is new is that this leverage now comes to bitcoin and ether on a U.S. exchange for the first time.

The source of demand is known. When Korea tightened its rules, retail investors moved into 3x funds in the U.S., as we reported earlier. For that investor, the U.S. market now offers a crypto option as well.

The past year of the Nasdaq shows the index behind TQQQ, the best-known 3x fund.

What Is Left

The approval is in; sales have not started. The next concrete step is Volatility Shares' S-1 registration becoming effective.

Further reading: What Is Leverage? · Crypto ETFs

Sources: The text of the order, its rationale and its dates come from SEC Release No. 34-106577 (primary source). The tickers, CFTC/NFA oversight and the count of 3x products trading in the U.S. rely on reports from Crypto Briefing, The Coin Republic and TechFlow; these could not be verified in the primary document. The worked example uses hypothetical price moves and excludes fees and futures roll costs.