Bitcoin and Ethereum coins on three illuminated rails representing leveraged futures exposure

Wall Street Wants to Triple Bitcoin and Ethereum’s Daily Moves. The Existing Funds Reveal the Real Risk

By Isaac • August 16, 2026 3:06 pm • Comments

Wall Street may soon have a new way to turn an already volatile crypto trade into something even faster.

Cboe has asked the Securities and Exchange Commission for an exchange-rule exception that would help clear the way for proposed Volatility Shares funds targeting three times the daily performance of Bitcoin and Ethereum futures benchmarks.

That word—daily—is the part investors cannot afford to skim past.

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What Cboe is actually asking the SEC to approve

According to CryptoSlate, the proposed funds would seek daily results equal to three times the performance of Bitcoin and Ether futures benchmarks. The portfolios would primarily use first- and second-month contracts traded on CME, with positions adjusted as the benchmark moves and as money enters or leaves the funds.

The request is important, but it stops short of a launch approval. Clearing the exchange-rule issue would remove one obstacle.

The products would still need to complete the separate registration and trading steps that apply before shares could reach investors.

The proposal also allows other instruments—including later-month futures, related exchange-traded products and listed options—if the preferred contracts become unavailable because of position limits, margin requirements or other market constraints. That flexibility can keep a fund operating, but it can also introduce more distance between the return an investor expects and the return the fund actually delivers.

The existing 2x funds provide a warning

Volatility Shares already runs leveraged crypto products, giving investors a live record to examine. The sponsor’s official ETHU fund page covers its 2x Ether strategy, while its BITX fund page covers the 2x Bitcoin product.

For periods ending June 30, CryptoSlate reported that ETHU posted a 48.81% NAV loss in the second quarter, a 79.61% loss over one year and a 96.15% average annualized loss since its June 2024 inception. BITX posted a 29.76% quarterly NAV loss and a 78.93% one-year loss over the same period.

Those figures do not predict the path of a future 3x fund. Bitcoin and Ether prices, futures basis, expenses, financing costs, roll execution and the sequence of daily moves all affect the result.

But the losses do show how dangerous it is to treat a daily leveraged ETF like a simple long-term multiple of the underlying asset.

Why “3x” does not mean three times the long-term return

FINRA’s investor guidance explains that leveraged exchange-traded products typically reset every day. Over periods longer than one session, compounding can pull the fund’s result far away from the headline multiple—especially in a volatile market.

Consider a benchmark that drops 10% on day one and rises 10% on day two. It starts at 100, falls to 90 and recovers to 99, leaving it down 1%.

A frictionless 3x daily product would fall from 100 to 70 on the first day. A 30% gain from that smaller base would then lift it only to 91.

The benchmark is down 1%, but the leveraged product is down 9%, even before fees, financing and other performance gaps.

The same daily reset also forces the fund to rebalance its futures exposure after market moves. In a trending market, that mechanism can magnify gains.

In a choppy market, it can repeatedly buy after advances and sell after declines, compounding damage even if Bitcoin or Ether eventually returns near its starting price.

The opportunity—and the line investors should not cross

There is a legitimate use case for a tightly managed trading tool that offers magnified exposure without requiring an investor to open a futures account. Experienced traders may value the familiar ETF wrapper, defined daily objective and regulated market access.

This proposal offers a different trade from owning more Bitcoin or Ethereum. It is a short-horizon product built around futures, daily resetting and aggressive leverage.

The SEC decision will determine whether Cboe can move one step closer to listing it. The existing 2x funds already show what can happen when the market moves the wrong way—or merely takes a rough path to the right destination.

For investors, the headline multiplier is the attraction. The reset mechanism is the real product.

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