Volatility at its peak: 3x BTC ETFs approved

[LuckyCrypto777]

The first triple-leveraged funds on Bitcoin (and Ethereum) have been approved in the US. Their price will move approximately three times faster than BTC and ETH in a single day.
Such instruments are particularly risky, but the very fact that the SEC has approved them demonstrates how far crypto has already penetrated traditional markets.

In my opinion, this will increase volatility and slightly improve liquidity. After all, risk funds will be interested.

https://ru.tradingview.com/news/coinpedia:ae4fa82b5094b:0-sec-approves-3x-leveraged-bitcoin-ether-and-other-etps-for-listing/

[Oshosondy]

But bitcoin ETF 3X is very risky, just like those products like BTC 3X long on exchanges that are listed under the spot market. You can say it will give more liquidity, but the first thing you should think about is liquidation and how risky they are. I have been seeing some news about it recently I think in August or early September.

[LuckyCrypto777]

But bitcoin ETF 3X is very risky, just like those products like BTC 3X long on exchanges that are listed under the spot market. You can say it will give more liquidity, but the first thing you should think about is liquidation and how risky they are. I have been seeing some news about it recently I think in August or early September.

That's why I never traded with leverage. With a smart strategy and averaging, a normal trader can get by with a regular spot.

I'd guess that funds aren't just regular traders, and the loss of deposits won't be that significant in the overall ratio. But in any case, it's a boost to trading volumes.

[slaman29]

The first triple-leveraged funds on Bitcoin (and Ethereum) have been approved in the US. Their price will move approximately three times faster than BTC and ETH in a single day.

Massive milestone blablabla I'm actually bored with ETF news for BTC.

Remember guys, ETFs leveraged like this just makes or loses money faster (price doesn't move faster btw OP). But does it change things on chain? Nope. Does it increase the risk of extreme liquidation yes.

Doesn't affect me, or most people using BTC, but the news will.

[atookz]

One more note: the listing rule is the one that the SEC approved – not the products themselves – so they cannot be traded just yet. They are still awaiting the S-1 registration to go into effect and there's no launch date yet. They also don't hold actual BTC, they use CME futures.

As @slaman29 mentioned, it's not the BTC price that is changing faster, it is the profits and losses of the holder. The "3x" is only valid per day. For example, if BTC goes up 10% then down 10%, the result is -1%, but with a 3x product, up 30% then down 30% gives you -9%. A market that continues to fluctuate in price will steadily erode the value. It's known as volatility decay.

The difference from 3x longs on exchanges is that there's no margin call or liquidation, so the most you can lose is what you put in. However, if BTC experiences a significant sell-off on one day, the value could be completely erased. Volume and liquidity will probably rise, but it's difficult to say how much impact it will have on the spot price, as they are futures-based products.

[Alphakilo]

But bitcoin ETF 3X is very risky, just like those products like BTC 3X long on exchanges that are listed under the spot market. You can say it will give more liquidity, but the first thing you should think about is liquidation and how risky they are. I have been seeing some news about it recently I think in August or early September.

The risk may be high enough but the fact remains that cryptocurrency has become more mainstream than it ever was and it is even allowed for regular stocks market.
Wall Street funds can now trade crypto currency and this is definitely going to boost trading volume and am sure just as speculated, this may likely trigger sharp price swings mostly during the close of market.

[nelson4lov]

But bitcoin ETF 3X is very risky, just like those products like BTC 3X long on exchanges that are listed under the spot market. You can say it will give more liquidity, but the first thing you should think about is liquidation and how risky they are. I have been seeing some news about it recently I think in August or early September.

If you think a Bitcoin 3x ETF is risky, what do you have to say about people who use 10x leverage, up to 100x leverage on crypto exchanges right now? The ETF is for people who need more exposure to Bitcoin but have limited capital. The 3x ETF gets them there, and it's fundamentally different from the use of leverage on exchanges.

This type of ETF already exists in TradFi, and people use it a lot.

[shinratensei_]

Went from "Bitcoin is too volatile, it's too risky" to "We need 3x of Bitcoin volatility" in just few years is funny as hell. Institutional players initially refuse the existence of bitcoin not because it's bad but because they don't know how to make money yet. But i really hope none of those fund managers invest into this thing, too risky. Any leveraged trade is unnecessary risk if the intention wasn't speculation or gambling. Well, the fiduciary duty won't let any sane fund managers invest in this anyway.

[Don Pedro Dinero]

But bitcoin ETF 3X is very risky, just like those products like BTC 3X long on exchanges that are listed under the spot market. You can say it will give more liquidity, but the first thing you should think about is liquidation and how risky they are. I have been seeing some news about it recently I think in August or early September.

This shows just how fully integrated Bitcoin is into the financial system. There were already 3X ETFs on the Nasdaq 100, for example. And, yes, they are risky. If things go your way, you make money much faster, but you can also go bust much faster.

One more note: the listing rule is the one that the SEC approved – not the products themselves – so they cannot be traded just yet. They are still awaiting the S-1 registration to go into effect and there's no launch date yet. They also don't hold actual BTC, they use CME futures.

As @slaman29 mentioned, it's not the BTC price that is changing faster, it is the profits and losses of the holder. The "3x" is only valid per day. For example, if BTC goes up 10% then down 10%, the result is -1%, but with a 3x product, up 30% then down 30% gives you -9%. A market that continues to fluctuate in price will steadily erode the value. It's known as volatility decay.

The difference from 3x longs on exchanges is that there's no margin call or liquidation, so the most you can lose is what you put in. <...>]

Those are good points to bear in mind. In any case, even though it is different and there is no margin call or liquidation, it is a product that is obviously riskier than simply holding bitcoin or buying a bitcoin ETF.

[tbct_mt2]

The first triple-leveraged funds on Bitcoin (and Ethereum) have been approved in the US. Their price will move approximately three times faster than BTC and ETH in a single day.
Such instruments are particularly risky, but the very fact that the SEC has approved them demonstrates how far crypto has already penetrated traditional markets.

In my opinion, this will increase volatility and slightly improve liquidity. After all, risk funds will be interested.

Triple leverages won't make price moving faster than no leverage in a single day. Such things are risky and trigger many liquidations in short time, not in long term. In long term, price follows value quite closely while in short term, leverages are affected by market manipulations and liquidations, both with long squeeze and short squeeze.

Leverages are always risky and fast way to lose money, in any markets, with any assets, and with any leverages. When you use leverages, risk escalates and there will be risk of liquidations in the future.