Tuttle Capital Management has made headlines by filing for 10 leveraged crypto ETFs with the SEC, presenting a high-risk, high-reward opportunity.
What Are Leveraged Crypto ETFs?
Leveraged crypto ETFs use financial derivatives and borrowing to amplify price movements of assets. Tuttle Capital's ETFs are designed for 200% of daily returns—both gains and losses—of underlying cryptocurrencies. This means if an asset's price rises by 1%, the ETF rises by 2%, and if it falls by 1%, the ETF falls by 2%. A 50% drop in the underlying asset could result in a total loss of the investor's principal within a single trading day.
New ETFs for Popular Cryptocurrencies
Among the 10 proposed ETFs, several well-known cryptocurrencies like XRP, Solana, and Litecoin are featured with new 2X leveraged products. Tuttle also includes memecoins such as TRUMP, BONK, and MELANIA, known for their volatility, in their filing.
Testing the Limits of SEC Approval
Tuttle Capital's filing comes amid a leadership shake-up at the SEC. Acting Chair Mark Uyeda replaced Gary Gensler, raising hopes in the industry for more crypto product approvals. The SEC's new crypto task force led by Hester Peirce will play a crucial role in deciding which filings are approved.
Tuttle Capital's filing is part of a broader trend in the growing crypto ETF market. Despite the speculative nature of these assets, interest in crypto ETFs continues to grow.
