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High-Leveraged Crypto ETF Applications on Hold After SEC Warnings
Yahoo Finance· 2025-12-03 23:26
Regulatory Concerns - The U.S. Securities and Exchange Commission (SEC) has issued warnings to issuers of high-leveraged exchange-traded funds (ETFs), including proposed crypto ETFs, due to potential risks associated with these products [1][2] - The SEC has halted the review of these funds until the concerns raised are addressed by the issuers [1] Issuers and Products - A total of nine issuers, including ProShares, which already has leveraged crypto ETFs on the market, received warnings from the SEC [2] - Defiance has filed paperwork to release 49 funds offering three times long and short leveraged exposure to tech and crypto-focused firms, gold, and individual cryptocurrencies like Bitcoin, Ethereum, and Solana [4] Market Trends - Leveraged ETFs are designed to amplify returns by holding debt, but they also increase the risk of compounded losses [3] - BlackRock's iShares Bitcoin Trust (IBIT) has reached approximately $70 billion in assets under management, contributing to a total of about $122 billion across 11 Bitcoin funds [5] - Recent weeks have seen the listing of funds for XRP, Solana, Dogecoin, and Chainlink on U.S. exchanges, indicating a growing interest in crypto-related investment products [5]