A CryptoSlate analysis highlights that even if an investor correctly predicts Bitcoin's long-term recovery, their 3x leveraged ETF position might still incur significant losses. This is primarily due to the fund's daily reset mechanism, which can make holding the position for extended periods an expensive habit. The SEC on October 2 approved exchange-listing rules for proposed 3x Bitcoin and Ethereum funds from VS Trust. However, the daily compounding of gains and losses means that a leveraged fund continually resizes its exposure based on its current capital. When the market falls, the fund reduces its position, leading to smaller gains when a rebound occurs. The SEC's investor bulletin on leveraged funds cited a historical example where an unnamed index gained 8% over four months, while a 3x daily leveraged fund lost 53%.