According to Zhito Finance App, shortly after a new batch of ultra-leverage products tested the regulatory tolerance limits, a new ETF proposal has emerged that significantly increases the leverage ratio, essentially doubling it. Volatility Shares has submitted an application to launch a fund designed to provide 5x daily returns on some of the most volatile assets in the global market. These assets include individual stocks like Tesla (TSLA) and Nvidia (NVDA), as well as cryptocurrencies such as Bitcoin and Ethereum. Presently, there are no 5x or even 3x leveraged individual stock ETFs in the U.S. market. The long-standing regulations by the U.S. Securities and Exchange Commission (SEC) have restricted such risk exposures, making this Florida company’s actions not just aggressive but unprecedented. This move appears to serve as a new high-pressure test of the regulatory framework. The current regulatory environment shows an unusually permissive tendency—allowing exchanges to introduce sports betting products, retail-oriented cryptocurrency investment products, and leveraged tools in high-risk financial areas that were once considered off-limits. However, understanding the regulatory stance towards this application may take time, as the SEC has been closed for over a week due to the U.S. government shutdown. It remains unclear how this proposed fund will pass SEC scrutiny, as the SEC previously set the leverage limit for new individual stock ETFs at 2x. Besides covering Bitcoin and Ethereum, the proposed fund also includes stocks such as AMD (AMD), Strategy (MSTR), Palantir (PLTR), as well as smaller cryptocurrencies like Solana and Ripple. Nevertheless, in the increasingly competitive U.S. ETF market, which already boasts around 4,500 funds, this strategy is undoubtedly eye-catching. Volatility Shares declined to comment. Similar products have reportedly appeared in other regions. Data compiled by ETF analyst Henry Jim indicates that the European market currently has about 40 funds with 5x leverage, managing a total of approximately $274 million. Most of these funds track benchmark indices like the Nasdaq 100, S&P 500, and the "seven giants" of U.S. stocks, as well as U.S. Treasuries, but none focus on individual stocks. Jim noted that the U.S. market is larger, and risk-seeking American investors are likely to embrace high-yield products, suggesting that the new proposed fund may possess popularity potential. However, signs are emerging that investors are starting to show fatigue—as leveraged funds have experienced outflows over the past three months. Currently, the biggest obstacle remains the ongoing government shutdown in the U.S. An announcement from the SEC on September 30 indicated that investment companies could continue to submit applications during the shutdown; these applications will automatically take effect after a specified period, based on certain rules, once the regulatory agency resumes operations. The recent surge in ultra-leverage products has reignited debates regarding their pros and cons. Data shows that nearly one-third of the ETFs launched this year feature some form of leverage. Asset management companies argue they are merely meeting investor demands; however, critics warn that many retail traders may overlook the details and risks associated with these "turbocharged" funds. Mohit Bajaj, head of ETFs at WallachBeth Capital, pointed out that another major hurdle is whether market makers and swap trading counterparties will support such products. These institutions (mainly the financing departments of banks) are responsible for designing and providing leveraged derivatives, and their participation is crucial for the smooth operation of the fund. "This will face strict scrutiny," stated Bajaj, noting that banks may adopt a cautious stance regarding the risks, capital requirements, and regulatory perceptions associated with products that amplify risk exposures by 5x. According to the application documents, the proposed fund by Volatility Shares plans to use various financial instruments, including swaps and options, to achieve its goal of 5x daily returns on the underlying assets and will adjust positions daily to meet this return multiple. Bajaj cautioned, "Investors need to exercise caution, especially during market corrections."