Leverage Shares to launch Bitcoin and Ethereum funds in Europe amid market collapse

Leverage Shares plans to launch leveraged crypto funds next week

Leverage Shares is reportedly looking to roll out a first-of-its-kind ETF offering 3x leverage on Bitcoin and Ethereum, Bloomberg ETF analyst Eric Balchunas stated in a X post on Friday.

The products comprise 3x long and 3x short leverage funds for both assets, with the launch expected to occur next week on the Switzerland-based SIX Exchange.

The move would mark an expansion in Leverage Shares' portfolio of leveraged products, providing investors with new tools to capitalize on crypto market movements. The firm already has similar products for several stocks, including Apple, Tesla, Facebook and Amazon, among others.

This is not the first time a company has intended to launch 3x-leveraged crypto ETFs. Defiance Investments proposed a similar set of leveraged crypto-related ETFs in a filing with the US Securities and Exchange Commission (SEC) in October. The application included 49 funds that would offer investors 3x leveraged and inverse leveraged exposure.

These funds would provide three times the daily return (both long and short) exposure to Bitcoin, Ethereum, Solana, crypto-focused stocks, tech stocks, and gold.

The move comes amid a sustained downtrend in crypto, with both Bitcoin and Ethereum dropping 21% and 26% so far in November. BTC is trading slightly below $84,000, while ETH has dropped to $2,700 amid strong bearish headwinds over the past week.

The launch of leveraged crypto ETPs could prove risky, given the volatile nature of crypto assets. Market participants have expressed concern about the potential impact the funds could have on investors, suggesting that high leverage exposure could lead to immediate liquidations during periods of strong volatility.

Eric Balchunas also stated in his post that the "timing is either really good or really bad depending on your POV."