Three Altcoins Have Recently Gained Leveraged Crypto ETFs

Volatility Shares Launches New Leveraged ETFs

Volatility Shares has introduced three new exchange-traded funds (ETFs) designed to enhance the price movements of cryptocurrencies, providing traders with more options to engage in leverage-based investments in the digital asset market.

The newly launched ETFs offer 2x exposure to Cardano, Stellar, and Chainlink, which are among the major altcoins in the cryptocurrency landscape. As of Wednesday afternoon, their market caps stood at $9 billion, $6.3 billion, and $5.6 billion, respectively, according to CoinGecko.

Alongside the 2x ETFs, the company has rolled out offerings that provide traditional exposure to futures for Cardano, Stellar, and Chainlink. Previously, Volatility Shares focused on creating a 2x ETF for Bitcoin, Ethereum, Solana, and XRP.

Leveraged ETFs have gained traction in recent years, helping traders amplify their daily profits through financial derivatives and borrowing. In fact, Volatility Shares was the first to launch a leveraged crypto ETF in the U.S. for Bitcoin futures back in 2023.

Since the introduction of the 2x Bitcoin Strategy ETF (BITX), interest has surged. On average, about 13 million BITX shares are traded daily. This figure is actually double the daily volume for the Fidelity Wise Origin Bitcoin Fund (FBTC), which tracks Bitcoin’s spot price.

As Sunny Sun, a marketing analyst at Volatility Shares, noted, the launch of these six ETFs marks a shift toward more focused asset exposure. “These products target sophisticated traders looking for precise access to specific digital asset ecosystems,” Sun explained.

The introduction of the Spot Bitcoin ETF in early 2024 was a significant milestone for the digital asset sector, bridging the gap between cryptocurrencies and traditional finance. Such ETFs allow investors to gain exposure to digital currencies without the need to purchase or store them directly.

Following the onset of Donald Trump’s second presidential term, various assets including Solana, XRP, and Dogecoin have appeared in a more favorable regulatory environment, even if the SEC has implied there are still limitations.

This month, in a group call, SEC officials advised ETF issuers against marketing products with 5x exposure to assets, including cryptocurrencies. Moreover, the agency has expressed concerns regarding the risks associated with 3x leveraged funds.

A few months ago, Volatility Shares submitted applications for 27 products aimed at 3x and 5x exposure, which include cryptocurrencies and companies like Coinbase.