Published: June 25, 2024
GraniteShares has filed with regulators to launch a suite of 3X leveraged exchange-traded funds tied to four major cryptocurrencies: Bitcoin, Ethereum, XRP and Solana. Each product will feature both bullish and bearish versions, offering investors amplified exposure to market movements in either direction.
Ambitious Push into Leveraged Crypto
The filings outline plans for eight new funds, including 3X long and 3X short ETFs for each digital asset. By pursuing triple leverage, GraniteShares aims to cater to traders seeking higher returns—while acknowledging the heightened risk of amplified losses. The proposed structure mirrors traditional leveraged ETF models but applies them to the crypto market’s unique volatility profile.
Fund Mechanics and Ticker Structure
Under the proposal, the long funds target 300% of the daily returns of their respective benchmarks, and the short ETFs aim for –300% of daily performance. Bitcoin and Ethereum products focus on the largest and second-largest tokens by market cap, respectively, while XRP and Solana offerings address growing demand for high-throughput networks. Each fund’s ticker is designed to reflect its asset and direction, providing clarity for traders.
Balancing Risk and Reward
Leveraged ETFs carry path dependency and can suffer significant volatility drag when held longer than a single trading session. GraniteShares emphasizes that these funds are intended for sophisticated investors who understand leverage mechanics. Market participants are advised to monitor daily rebalances closely, as rapid price swings in crypto can lead to outsized gains or losses.
Regulatory Landscape and Industry Impact
If approved, these 3X leveraged crypto ETFs would represent a notable expansion of institutional-grade products in the U.S. digital asset market. Coming on the heels of recent spot Bitcoin ETF approvals, the proposals suggest rising confidence among asset managers in navigating regulatory requirements. Approval could open the door for further innovation in leveraged and inverse crypto products.