Jim Cramer, a popular CNBC finance host, continues to deliver dramatic public statements almost every day as the year 2025 closes out. This time the subject of his obstructed criticism was leveraged exchange-traded funds, which he labels as "not needed" financial instruments.
The trigger was the SEC’s recent decision to halt review of several applications for new highly leveraged ETFs in the 3x and 5x category. The decision is tied to concerns about extreme risk exposure and compliance with federal limits on leverage inside exchange-traded products.
The regulator sent letters to nine issuers and singled out proposals from Direxion, ProShares and GraniteShares, according to Reuters. Their filings aimed to bring products with amplified daily targets far beyond the already controversial 2x models.
The SEC signaled that the current rule set does not guarantee protection for retail traders if such products enter the market. So, that is the context behind Cramer’s comment.
What about XRP and Bitcoin?
Bitcoin and XRP both rely on ETF channels for liquidity and institutional access, but these halted filings do not touch spot crypto ETFs or existing futures-based 1x and 2x products.
The SEC’s action targets extreme leverage, not the general crypto ETF roadmap. For BTC, the move limits speculative blowouts that often warp short-term pricing when leveraged ETPs wash out during volatility. For XRP, the pause removes the risk of sudden forced buying or selling that synthetic leverage can create around ETF flows.
As things stand, the practical message is that the SEC is locking out structures it sees as dangerous, while crypto-linked ETFs with normal leverage remain unaffected. For now.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team