Tuttle Capital Management has made headlines by filing for 10 leveraged crypto ETFs with the SEC. These funds aim to double the daily returns of their underlying assets, offering high-risk opportunities for investors.
What Are Leveraged Crypto ETFs?
Leveraged ETFs utilize financial derivatives and borrowing to magnify price movements of assets. Specifically, Tuttle Capital's proposed ETFs aim to deliver 200% of the daily returns, either gains or losses, of the underlying cryptocurrencies. This means if the asset price increases by 1%, the ETF would rise by 2%, and similarly, if the price drops by 1%, the ETF would decrease by 2%. A 50% drop in the underlying asset could result in investors losing their entire principal in one trading day. Such instruments are intended for skilled traders who understand the volatile nature of the crypto market.
New ETFs for Popular Cryptocurrencies
Among the 10 proposed leveraged ETFs, popular cryptocurrencies such as XRP, Solana, and Litecoin are highlighted. This marks the first 2X leveraged products for these assets. The filing spotlights the **2X Long XRP Daily Target ETF**, **2X Long Solana Daily Target ETF**, and **2X Long Litecoin Daily Target ETF**, which will track daily performance, amplifying both returns and losses. Tuttle Capital is also innovating by including several memecoins, such as **TRUMP**, **BONK**, and **MELANIA**, known as some of the most volatile and speculative assets in the market. The ETF tied to the **Melania meme coin** is particularly notable as it is the first-ever leveraged ETF for this asset. The filing also features cryptocurrencies with lower market caps, such as **Cardano**, **Polkadot**, and **Chainlink**, providing a first-time leveraged ETF option for these altcoins.
Testing the Limits of SEC Approval
Tuttle Capital's filing arrives amid a leadership transition at the SEC. Pro-crypto Acting Chair [**Mark Uyeda**](https://bsc.news/post/mark-uyeda-named-acting-sec-chair-after-gary-gensler-resigns) has replaced Gary Gensler, bringing new hope to the industry for more crypto-related product approvals moving forward. James Seyffart, an ETF expert at Bloomberg Intelligence, views this filing as a test of the regulator's limits. The new [**crypto task force**](https://bsc.news/post/us-sec-announces-new-crypto-task-force-led-by-hester-peirce) led by Hester Peirce will play a crucial role in determining approval outcomes. With some included assets being highly speculative, like memecoins, the SEC's decision is highly anticipated.
The filing from Tuttle Capital highlights the growing interest in crypto ETFs. Alongside other major asset managers, Tuttle seeks to expand investor options, including risky assets like meme coins in their applications. Despite their speculative nature, the crypto ETF market is rapidly expanding, reflecting the sector's ambitions within the SEC's regulatory framework.
