Leveraged Crypto ETFs: Tuttle Capital Proposes 2x Memecoin Trackers

Tuttle Capital Management, an investment firm, has proposed the launch of the first leveraged cryptocurrency exchange-traded funds (ETFs) in the U.S. The company has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to develop 2x leveraged crypto ETFs, including ones that would track the Donald and Melania Trump memecoins.

The proposed ETFs aim to track the daily returns of several different cryptocurrencies, including Chainlink (LINK), Cardano (ADA), Polkadot (DOT), XRP (XRP), Solana (SOL), Litecoin (LTC), Bonk, and the Melania and Donald Trump coins. Tuttle Capital plans to generate these returns through swaps, call options, and direct investments.

While the leveraged crypto ETFs could offer higher gains, investors should be aware of the increased risks. Tuttle Capital warns in its SEC application that using leverage amplifies both returns and losses. A significant drop in the underlying asset's value could result in investors losing their entire principal within a single trading day. Although 50% drops are rare with stocks, crypto altcoins and memecoins are known for sudden declines of 10% or more. A 10% drop in the underlying cryptocurrency would mean the ETFs decline at least 20%.

If approved by the SEC, the proposed crypto ETFs could be available to investors by April of this year. Tuttle Capital's plans to launch these ETFs come as the cryptocurrency market continues to evolve and gain mainstream acceptance.

As part of the proposal, Tuttle Capital is targeting Solana (SOL) for a leveraged ETF. Over the last three months, the price of SOL has gained 32%. This performance highlights the potential for significant returns in the cryptocurrency market, but also underscores the risks associated with investing in volatile assets.