SEC approves 3x Bitcoin and Ether ETFs, BITH and ETHK set for launch

The Securities and Exchange Commission (SEC) has approved proposed rule changes from Cboe BZX, allowing the listing of 3x Bitcoin and 3x Ether exchange-traded funds (ETFs) alongside leveraged products tracking gold, silver, crude oil, and natural gas. Volatility Shares, a financial product specialist known for launching leveraged ETFs, is behind these offerings. The Bitcoin product is expected to trade under the ticker BITH, while the Ether fund is designated as ETHK in regulatory filings.

Funds structured as commodity ETPs

Though the products are marketed as ETFs, the SEC classifies them as commodity-based exchange-traded products (ETPs), not traditional investment-company ETFs. Rather than holding physical Bitcoin or Ethereum, the funds seek to deliver three times the daily performance of their underlying assets by trading short-dated futures contracts.

This distinction places the newly approved products apart from recent spot Bitcoin and Ethereum ETFs, which have attracted significant inflows by offering direct exposure to cryptocurrency prices.

BITH and ETHK will use cash as collateral for futures positions, according to the registration statements. If suitable futures contracts become unavailable, the funds have options to use related ETFs, ETPs, or exchange-listed options to achieve their investment objectives.