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- Tuttle Capital’s proposal of ten 2x leveraged crypto ETFs, including XRP and Solana, could reshape crypto investment with amplified daily gains or losses.
- The SEC’s decision on these ETFs, including meme coins like BONK and MELANIA, tests regulatory boundaries amid renewed crypto optimism.
Tuttle Capital Management has submitted an application to the United States Securities and Exchange Commission (SEC) to introduce ten leveraged crypto exchange-traded funds (ETFs), including Solana (SOL) and XRP. If approved, these ETFs could introduce the first leveraged products for several tokens.
One notable proposal is the Tuttle Capital 2X Long XRP Daily Target ETF, positioned as a trailblazer in its category. The filings also highlight leverage-based ETFs for Solana and Litecoin. While these cryptocurrencies have been part of previous filings, Tuttle’s plan expands the scope by incorporating Cardano, Chainlink, and Polkadot, signaling a step forward in crypto innovation.
Additionally, the inclusion of meme coins like TRUMP, MELANIA, and BONK brings an experimental dimension to the filings. Bloomberg Intelligence analyst James Seyffart views this initiative as a regulatory test, exploring the boundaries of SEC acceptance.
To be very clear here. This is a case of issuers testing the limits of what this SEC is going to allow. I'm expecting the new crypto task force (led by @HesterPeirce) to likely be the lynchpin in determining what's gonna be allowed vs what isn't
— James Seyffart (@JSeyff) January 27, 2025
Proposed Leveraged ETFs Could Double Gains or Losses
The filings propose 2x leveraged ETFs designed to amplify the daily performance of their underlying assets. This means investors could potentially double their gains—or losses—within a single trading day. The financial mechanisms used, such as swaps, call options, and direct investments, highlight the high-stakes nature of these products.
However, risks abound. A single-day drop of over 50% in the underlying asset’s value could wipe out an investor’s principal entirely. Bloomberg’s senior ETF analyst Eric Balchunas underscored the extreme volatility, emphasizing the potential for rapid shifts. Unless disapproved by the SEC, these ETFs may commence trading as early as April.
“So in theory unless the SEC disapproves them they could be out and trading in April,” said Balchunas.
The proposals also include the first-ever filing for the Melania meme coin ETF. Balchunas noted the novelty of launching a 2x MELANIA ETF without a simpler 1x version, saying, “That is unusual.” Such filings highlight Tuttle Capital’s willingness to chart new territory in the ETF market.
New Proposals Test SEC’s Crypto Stance
The SEC’s leadership shift under pro-crypto Acting Chair Mark Uyeda has renewed optimism in the crypto sector. Tuttle Capital’s recent filings are viewed as part of a broader trend of crypto-backed financial products awaiting regulatory scrutiny. Similarly, Osprey and REX Shares recently proposed products tied to major assets, including Dogecoin (DOGE), XRP, and Solana.
However, analysts warn of varying approval prospects for these products. Established cryptocurrencies such as Solana, XRP, and Litecoin are regarded as stronger candidates due to their market capitalization and relative stability. In contrast, meme coins like BONK and MELANIA face criticism for their heightened volatility.
The timing of these proposals aligns with growing interest in decentralized assets, highlighted by a recent Litecoin ETF rule adjustment submitted by Canary Capital under the SEC’s 19b-4 process. According to Saravanan Pandian, CEO of KoinBX, the industry remains committed to innovation and meeting diverse market needs by incorporating assets such as XRP, Solana, and other emerging tokens.
Will the SEC Draw a Line?
Tuttle Capital’s move aligns with a broader trend of crypto ETF filings aiming to reshape traditional investment approaches. Market experts believe that additional proposals may soon follow, potentially expanding the variety of crypto-backed products available to investors.
Balchunas remains cautiously optimistic about the SEC’s stance, stating, “Will be interesting to see where the SEC draws the line (if at all) and why.” His remark underscores the unpredictable nature of regulatory approval, even for assets as well-known as Solana and XRP.
