The fund is designed to deliver twice the daily return of SUI, giving investors a way to gain leveraged exposure without directly holding the cryptocurrency
SUI Token News
The U.S. Securities and Exchange Commission has approved a leveraged exchange-traded fund tied to the SUI token from 21Shares, allowing investors to gain amplified exposure to the Sui ecosystem. The 2x leveraged SUI ETF began trading Thursday under the ticker TXXS on the Nasdaq.
The fund is designed to deliver twice the daily return of SUI, giving investors a way to gain leveraged exposure without directly holding the cryptocurrency. In practical terms, if SUI rises 10% in a single day, the ETF aims to rise by about 20%, with losses similarly magnified on the downside.
Rather than holding SUI tokens, the fund utilizes derivatives, including swaps and other financial contracts, to track the price movements of the token. The Sui Foundation announced the launch as questions persist about the risks of leverage in crypto markets.
Until now, the SEC has been reluctant to approve higher-leverage crypto investment products. In October, the regulator said it was unclear whether the proposed 3x and 5x leveraged ETFs would meet regulatory standards.
Earlier this week, the agency also issued a series of warning letters to fund issuers, cautioning against products that offer elevated levels of leverage across stocks, commodities, or digital assets. The approval comes as debate continues over curbing excessive leverage in cryptocurrency markets.
The debate is particularly relevant in crypto, where heavy use of borrowed money continues to amplify price swings and trigger sharp losses for traders. On Oct. 10, the crypto market saw its largest leverage-driven sell-off on record, with roughly $19 billion worth of positions liquidated as prices fell rapidly.
The fallout extended beyond leveraged traders to spot investors, who saw holdings decline in the weeks that followed. Bitcoin fell from a record high near $126,000 in October to below $80,000 in November.
Leverage plays a significantly larger role in crypto markets compared to traditional markets, largely due to the widespread use of derivatives exchanges and perpetual futures contracts. Platforms such as Binance and Bybit allow traders to take highly leveraged positions, often 10x, 50x or more, on perpetual futures that track an asset's price without an expiration date.
The SEC's approval of the 2x leveraged SUI #ETF represents a measured step in allowing amplified crypto exposure while regulators continue to monitor market stability and investor protection concerns.
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