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ETF issuer Volatility Shares recently filed with the US SEC to launch highly leveraged XRP ETFs, alongside other cryptocurrencies and stocks. Particularly, Volatility Shares has decided to file for a 5× leveraged XRP ETF, a move that caught many traders and analysts off guard.
Discussions have intensified among investors following the filing, as it stands out as one of the boldest attempts yet in the crypto ETF world, especially since the SEC has yet to even approve any 3× leveraged crypto products.
Volatility Shares’ Expansive ETF Filing
According to filings, Volatility Shares is planning to launch both 3x and 5x leveraged ETFs tracking the price of XRP alongside other major cryptocurrencies such as Solana, Bitcoin, and Ethereum. The ETF proposed by Volatility Shares will use futures, swaps and options to achieve a magnified daily performance exposure.
The move signals that the issuer is prepared to push the limits of what the US Securities and Exchange Commission (SEC) might tolerate, creating a major twist in the increasing popularity of investment funds linked to digital assets. If approved, the earliest activation date for these leveraged ETFs is December 29, 2025.
Market analysts were taken aback, with the filing seeing mixed reactions on social media platforms. ETF expert Henry Jim announced the scope of Volatility Shares’ filing on the social-media platform X. In his post, he exclaimed, “Sonic BOOOM! — 27 leveraged 3× and 5× single-stock ETFs filed by Volatility Shares!
His list of the Volatility Shares’ filing included tech heavyweights such as AMD, Amazon, Google, Nvidia, Palantir, and Tesla, alongside crypto-focused funds for Bitcoin, Ethereum, Solana, and XRP, and crypto-related stocks such as crypto exchange Coinbase and Bitcoin treasury firm Strategy. The extensive slate indicates that Volatility Shares is attempting to corner both the equity and crypto leverage markets.
Bloomberg ETF analyst Eric Balchunas also expressed astonishment regarding the filings. Balchunas added that the firm could be making an option on a long-term government shutdown, since if there’s no SEC action in 75 days, they can launch.
Risks Of Highly Leveraged ETFs
Volatility Shares’ proposal for a 5× leveraged ETF comes in the aftermath of the most severe crypto market liquidations, where over $19 billion was wiped out across crypto exchanges in a single weekend. Data from derivatives platforms showed that the majority of those liquidations came from highly leveraged positions.
Therefore, these proposed ETFs are a double-edged sword in terms of contributions to the crypto market. For one, it could provide an avenue for more institutional funds into XRP and other cryptocurrencies. If successful, these ETFs could also set a precedent for future high-risk crypto products in the US market.
On the other hand, the risk is also magnified. If XRP falls by 2% in a day, the 5× leveraged fund will lose 10%, and that’s just in one day.
Featured image from Adobe Stock, chart from Tradingview.com
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