These three altcoins just got leveraged crypto ETFs

Volatility Shares debuted three exchange-traded funds that amplify cryptocurrency price volatility on Wednesday, adding to the growing list of tools that enable traders to speculate on digital assets using leverage.

ETFs provide dual exposure to Cardano, excellentand Chain linkrepresenting some of the largest altcoins in the cryptocurrency market. They each had market caps of $9 billion, $6.3 billion and $5.6 billion, as of Wednesday afternoon, according to Queen Gekko.

In addition to the 2x ETFs, Volatility Shares has debuted funds that provide traditional exposure to Cardano, Stellar, and Chainlink futures. Previously, volatile stocks moved to create 2x ETFs for Bitcoin, Ethereum, Solanaand XRP.

Leveraged ETFs have become increasingly popular in recent years, amplifying daily returns for traders using financial derivatives and debt. In 2023, Volatility Shares launched the first leveraged cryptocurrency ETF in the US, which tracks Bitcoin futures.

Since the Volatility Shares 2x Bitcoin Strategy ETF (BITX) debuted, the product has seen notable adoption. On average, about 13 million BITX shares are traded daily, according to ETF database. That’s double the average daily trading volume of the Fidelity Wise Origin Bitcoin Fund (FBTC), a product from a legacy financial institution that tracks the spot price of bitcoin.

The emergence of these six ETFs represents a strategic shift from broad market exposure to micro-asset exposure, said Sunny Sun, marketing analyst at Volatility Shares. Decryption. “The target demographic for these ETFs consists of sophisticated traders seeking targeted exposure to specific digital asset ecosystems.”

In early 2024, the emergence of Bitcoin exchange-traded funds represented a landmark moment for the digital asset industry, creating a connective tissue between the crypto world and Wall Street. Bitcoin ETFs allow investors to gain exposure to digital assets without directly purchasing and storing Bitcoin. Over time, they have It emerged as my go-to tool Between institutions to gain exposure to an asset class.

Since US President Donald Trump’s second term began, issuers have offered leveraged cryptocurrency ETFs for digital assets including Solana, XRP, and XRP. Dogecoin Amidst a more favorable regulatory environment. However, the SEC noted that it has its limits.

In a conference call earlier this month, the SEC asked ETF issuers not to bring to market products that offer 5x exposure to assets and indices, including cryptocurrencies, per Bloomberg. Late last year, the watchdog also sent Warning messages To issuers interested in 3x leveraged funds, expressing concern about how to measure the associated risks.

Months ago, stocks fluctuated foot For 27 products offering 3x and 5x exposure. These apps covered cryptocurrencies and related stocks, such as Coinbase and Strategy.