Tuttle Capital Management has filed for 10 leveraged crypto exchange-traded funds (ETFs) with the U.S. Securities and Exchange Commission (SEC). These ETFs aim to double the daily returns of their underlying assets, presenting a high-risk, high-reward opportunity for investors looking to capitalize on the volatile world of cryptocurrency.
What Are Leveraged Crypto ETFs?
Leveraged ETFs use financial derivatives and borrowing to amplify movements in the price of assets. In this case, Tuttle Capital's proposed ETFs are designed to deliver 200% of the daily returns—either gains or losses—of the underlying cryptocurrencies. This means that if the price of an asset rises by 1%, the ETF would rise by 2%, and if the price falls by 1%, the ETF would fall by 2%. A 50% drop in the underlying asset could result in investors losing their entire principal in a single trading day. As such, these ETFs are tailored for experienced traders who understand the volatile nature of the crypto market.
New ETFs for Popular Cryptocurrencies
Among the 10 proposed leveraged ETFs, several well-known cryptocurrencies are featured, including XRP, Solana, and Litecoin. Notably, these assets are set to receive 2X leveraged products for the first time. The 2X Long XRP Daily Target ETF, 2X Long Solana Daily Target ETF, and 2X Long Litecoin Daily Target ETF are the highlights of this filing. These ETFs will track the daily performance of their respective assets, amplifying the returns (or losses). In addition to well-established cryptocurrencies, Tuttle Capital is also pushing the boundaries by including several memecoins in their ETF filing. These include TRUMP, BONK, and MELANIA, which are among the most volatile and speculative assets in the market. The Melania meme coin (MELANIA) ETF is particularly noteworthy as it marks the first-ever leveraged ETF tied to this asset.
Testing the Limits of SEC Approval
Tuttle Capital’s filing comes at a time when the SEC is undergoing a leadership shake-up. Pro-crypto Acting Chair Mark Uyeda has replaced Gary Gensler, sparking hope within the industry that the SEC will approve more crypto-related financial products under a potential President Trump administration. James Seyffart, an ETF expert at Bloomberg Intelligence, believes that this filing is a test of the SEC's boundaries. The new crypto task force led by Hester Peirce will play a crucial role in determining which filings are approved. With some of the assets included in Tuttle’s filing being highly speculative, such as memecoins, it remains to be seen whether the SEC will greenlight them.
The filing is part of a broader trend in the growing interest in crypto ETFs. Other asset managers, including Grayscale and Coinshares, have also filed for ETFs tied to various cryptocurrencies, including Litecoin. Despite the speculative nature of these assets, the overall crypto ETF market is expanding rapidly. Rex-Osprey and Osprey have also launched ETFs tied to Dogecoin, XRP, and Solana, pushing the envelope for what is possible within the SEC’s regulatory framework.
