3x Bitcoin ETFs and Leverage: Lessons From the $19B Liquidation
The SEC cleared 3x Bitcoin and Ether products a year after $19 billion in liquidations. How leverage and daily resets work, and five rules before you trade.
Key takeaways
- On October 10, 2025, more than $19 billion in leveraged crypto positions were force-closed in 24 hours, and about 90% were longs, according to the video.
- With 10x leverage, a move of about 10% against you can wipe out the whole position, and the exchange decides when you exit.
- Daily-reset 3x products can lose money even when the underlying coin barely moves. This is called volatility decay, and it is worst in choppy markets.
- Keep your core holdings out of any leveraged product, and write down your exit before you enter a trade.
- The same leverage math applies to XRP, which has CME futures and is offered with leverage on exchanges.
A year after the largest liquidation day in crypto history, US regulators have cleared the way for the first 3x leveraged Bitcoin and Ether products. In a Bullrunners video, host Josh Maher, who says he has traded funded accounts, argues that anyone tempted by these products should first understand what happened on October 10, 2025.
The video is not only for Bitcoin traders. The same leverage math applies to XRP and to any coin traded with borrowed money on any exchange. It explains how leverage takes the exit decision out of your hands, why daily-reset products can lose value in a sideways market, and five rules for keeping your core holdings safe.
What happened on October 10, 2025?
More than $19 billion in leveraged crypto positions were force-closed in a single 24-hour period, according to the video. Four days earlier, on October 6, Bitcoin had set a new all-time high above $126,000. Then a tariff threat against China hit the headlines, the price dropped, and leverage turned the drop into a cascade.
The video says about 1.6 million traders were liquidated. Data provider CoinGlass called it the largest liquidation event in crypto history. Around 90% of the closed positions were longs, meaning bets that prices would rise. The exchanges closed those positions automatically. The traders did not choose to exit.
What did the SEC approve?
On October 2, the SEC approved a rule change that lets Cboe list six new products from a firm called Volatility Shares. Each aims to deliver three times the daily move of its underlying asset. Two of them track Bitcoin and Ether, and the video describes them as the first 3x crypto products approved in the US.
A few details matter:
- They are not trading yet. A registration statement still has to go effective, and there is no launch date.
- They don’t hold coins. They hold futures contracts on CME, the Chicago derivatives exchange, not Bitcoin or Ether.
- There is no XRP version in this approval.
Why does leverage take the exit decision away from you?
Leverage makes gains and losses larger, but the video’s main point is that it also hands someone else the decision of when you exit. With 10x leverage, a move of about 10% against you can wipe out your entire position.
When thousands of leveraged positions are force-closed at once, that forced selling pushes the price lower. The lower price triggers the next batch of liquidations, and the process feeds on itself. According to the video, that is what happened on October 10.
The host says that when he traded funded accounts, the first rule was never to find a good entry. It was to know exactly what would make you stop. Most people liquidated that night never set that limit. Their exchange set it for them.
What is volatility decay?
Volatility decay is the loss leveraged daily products can suffer even when the underlying asset ends roughly where it started. These products aim for three times the move each day, then reset and start fresh the next day. The video walks through the example that FINRA, the US regulator for brokers, uses:
| Start | After day 1 | After day 2 | Net result | |
|---|---|---|---|---|
| Bitcoin | 100 | 90 (down 10%) | 99 (up 10%) | Down 1% |
| 3x daily product | 100 | 70 (down 30%) | 91 (up 30%) | Down about 9% |
That is before fees and futures costs. The effect is worse in a choppy, sideways market, which the video says describes how Bitcoin was trading that week.
How have 2x crypto funds actually performed?
The same firm already runs 2x products, and their results show the effect in practice. According to the video, over the year to June 30:
| Product | Reported one-year return | Underlying coin’s move |
|---|---|---|
| 2x Ether fund | About -80% | Ether down about 37% |
| 2x Bitcoin fund | About -79% | Bitcoin down about 45% |
The host notes that the coins themselves also fell over that year. But the 2x Ether fund lost more than double what Ether did. Leverage and the daily reset made the damage much larger. His conclusion is that a trader uses a product like this for days, not years. It is a tool for short-term trading, not something to hold.
Does this matter for XRP holders?
Yes. The video stresses that this is not only a Bitcoin problem. XRP has had futures on CME since 2025, and exchanges offer leveraged XRP trading every day. A 10% move against a 10x leveraged XRP position works the same way as it does for Bitcoin.
Five rules for using leverage
The host lays out five rules he would use as a trader:
- Split the bag. Your core holdings are never collateral and never go into a leveraged product. If you want to trade, use a separate pot, and decide its size before you start, not after a good week.
- Match the tool to the time. A daily-reset product is built for days. If your plan is to hold for months, it is the wrong tool.
- Write your exit first. Before entering, write down what would prove you wrong: a price level, a date or an event. On October 10, the exchange wrote people’s exits for them.
- If you can’t explain it, don’t use it. You should be able to say in one sentence where your liquidation price is, how the reset works and what it costs to hold.
- Check the calendar. Scheduled events, such as the release of Federal Reserve meeting minutes, can move prices. The host describes using leverage going into an event as a coin flip with a bigger bet.
The five-question leverage check
The video ends with a checklist to run before any leveraged trade. If any answer comes out wrong, the host says, you don’t trade.
- Is this money part of my core holdings? If yes, stop.
- Is this product built for my holding period?
- Have I written down what proves me wrong?
- Can I explain the liquidation price, the reset and the costs in one sentence?
- Is there a scheduled event in the next 7 days that could move the price 10%?
What to watch next
The new 3x Bitcoin and Ether products still need an effective registration statement before they can trade, so watch for a confirmed launch date. Until then, check where you already use leverage, whether through exchange margin, perpetual futures or existing 2x funds, and run each position through the checklist above. For XRP holders, the main question is simple: is any part of your core holding sitting somewhere it could be used as collateral?
Frequently asked questions
Has the SEC approved a 3x Bitcoin ETF?
According to the video, on October 2 the SEC approved a rule change letting Cboe list six products from Volatility Shares that aim for three times the daily move of their asset, including Bitcoin and Ether. They are not trading yet, because a registration statement still needs to go effective, and there is no launch date.
Do 3x Bitcoin products hold actual Bitcoin?
No. Per the video, they hold futures contracts on CME rather than Bitcoin or Ether.
What is volatility decay in leveraged ETFs?
Leveraged products reset every day, so losses and gains compound unevenly. In the video's example, Bitcoin falls 10% and then rises 10% to end down 1%, while a 3x product ends down about 9% before fees. FINRA uses this example.
Is there a 3x XRP ETF?
No. The video says there is no XRP product in this approval. XRP has had futures on CME since 2025, though, and exchanges offer leveraged XRP trading.
How much was liquidated on October 10, 2025?
The video says more than $19 billion in leveraged positions were force-closed over 24 hours and about 1.6 million traders were liquidated. CoinGlass called it the largest liquidation event in crypto history.
Education and commentary only, not financial advice. Crypto is volatile and you can lose money. Do your own research and speak to a qualified advisor before making investment decisions. Figures and quotes are as reported in the video on October 9, 2026 and may have changed since.
