ProShares' 3X Leveraged Ripple ETFs Set to debut
Rewritten Article:
Exciting news for XRP investors! The U.S. Securities and Exchange Commission (SEC) has given the green light to three XRP-focused exchange-traded funds (ETFs) from ProShares, with a public offering set for April 30, 2025. But, unlike traditional XRP ETFs, these won't hold the crypto directly – they'll use derivatives instead, sparking curiosity among analysts.
"Make no mistake, this ain't a straight-up XRP ETF," asserted ETF guru Nate Geraci in his rant on social media. These new offerings will comprise leveraged and inverse ETFs, allowing exposure to XRP's daily future price fluctuations. However, it's unusual for leveraged products to come first before a spot XRP ETF, as most crypto ETFs follows a different path – a question that puzzles Geraci.
Here's a rundown on the upcoming ETFs:
- Ultra XRP ETF: Offering a 2x leverage on the daily returns of XRP future prices.
- Short XRP ETF: Providing inverse exposure – allowing investors to profit from XRP's price decline.
- Ultra Short XRP ETF: Delivering nearly double the inverse (-2x) of the cryptocurrency's daily performance.
The SEC's recent nod for leveraged XRP products, like Vermont-based Teucrium's 2x Long Daily XRP ETF (XXRP), trading on NYSE Arca, suggests that the financial watchdog may feel more comfortable with derivative-based exposure over direct custody of crypto assets.
"There might be something up with the regulators' comfort levels when it comes to derivatives versus direct ownership of crypto assets," suggested an X user addressing Geraci's query. "Perhaps they're testing the waters for leveraged products before considering a spot XRP ETF."
The SEC's approval comes just weeks after it settled its well-publicized lawsuit against Ripple Labs, the company behind XRP. The prolonged case ended in a $50 million fine, significantly less than the SEC's initial demands – effectively clearing a major hurdle for XRP's future in the market.
ProShares, a seasoned player in the crypto-based financial sector, having launched the first Bitcoin futures ETF (BITO) in 2021, will now set foot in the XRP realm. This move could usher in easier access for banks, institutional investors, and retail traders, marking a significant stride for XRP integration into mainstream finance.
XRP enthusiast Arthur called it a "history-making milestone," praising the upcoming ETF for potential benefits like regulatory recognition and the possibility of "tidal waves of capital" pouring into the market.
With XRP's token currently trading around $2.28, the ETF's announcement has spurred a 4.6% surge in the last 24 hours. Over the previous week, XRP gained 7.4%, slightly trailing the rest of the crypto market's 8.2% rise during the same period. The token saw a 5% uptick over the last 30 days, continuing a strong momentum that has seen it jump more than 335% over the past year.
Bonus Insight: The SEC's approval of futures-based ETFs over spot XRP ETFs can be attributed to regulatory precedent, operational complexities, and delayed approvals of spot ETF applications due to concerns over market manipulation risks and custody solutions.
- The U.S. Securities and Exchange Commission (SEC) has approved three XRP-focused exchange-traded funds (ETFs) from ProShares, set to launch in 2025, sparking curiosity among analysts.
- Unlike traditional XRP ETFs, these upcoming offerings won't hold the crypto directly but will use derivatives instead, leading ETF guru Nate Geraci to assert that these are not straight-up XRP ETFs.
- The new ETFs include the Ultra XRP ETF, offering a 2x leverage on the daily returns of XRP future prices, as well as the Short XRP ETF, providing inverse exposure, and the Ultra Short XRP ETF, delivering nearly double the inverse (-2x) of the cryptocurrency's daily performance.
- The SEC's recent nod for leveraged XRP products may indicate a greater regulatory comfort with derivative-based exposure over direct custody of crypto assets, as seen with Vermont-based Teucrium's 2x Long Daily XRP ETF (XXRP), trading on NYSE Arca.
- ETF enthusiast Arthur views the upcoming XRP-focused ETF as a "history-making milestone," praising potential benefits like regulatory recognition and the possibility of "tidal waves of capital" pouring into the market.
- The SEC's approval of futures-based ETFs over spot XRP ETFs may be due to regulatory precedent, operational complexities, and concerns over market manipulation risks and custody solutions.
