In a bold move that could reshape U.S. ETF dynamics, Volatility Shares has filed to launch 27 highly leveraged ETFs, including the first-ever 5X single-stock ETF — a milestone for the $12 trillion ETF industry.
💥 What’s new:
The proposed ETFs would deliver up to five times the daily return of underlying stocks such as Tesla, Nvidia, AMD, Amazon, Palantir, Coinbase, and MicroStrategy — names at the core of AI and crypto-driven rallies.
💬 Until now, U.S. regulators have capped leverage at 2X. If approved, these products would push the frontier of speculative exposure in a market already grappling with record valuations and volatility.
📉 Risk implications:
Experts warn that amplified upside potential comes with the same magnified downside risk — as seen in last week’s $19 billion crypto liquidations and the $26 billion ETF-driven selloff identified by JPMorgan.
As Rahul Sharma of Indxx noted, the new framework “introduces more systemic risk” by lowering the barriers for extreme leverage.
🧠 Strategic takeaway:
For traders, this could be a new instrument for tactical plays.
For regulators and risk managers, it’s a test case for how much leverage modern markets can safely absorb — especially when AI, crypto, and retail trading converge.