Today, on April 8th, the very first in the United States Exchange-Traded Fund (ETF) for XRP, the cryptocurrency of Ripple.
However, it is not the long-awaited spot stock exchange fund, but a lever ETF that was developed to pursue the daily return of XRP with a factor of two-a striking choice for a first XRP fund.
XRP gets its first ETF in the USA
The fund is administered by the asset manager Teucrium and is traded under the name Teucrium 2x Long Daily XRP ETF.
The ticker symbol is XXRP and the fund is listed at the New York Stock Exchange (NYSE).
The ETF is a so-called 2x Leveraged product. This means that the fund strives for the double return of XRP every day. If the price of XRP increases by 5 percent in one day, the ETF ideally delivers 10 percent.
With a price decline of 5 percent, however, this also means a loss of 10 percent. It is important to know that this effect only applies on a daily basis; Over longer periods, the results can deviate significantly due to the composite effect of daily price fluctuations.
Teucrium calculates an annual cost percentage of 1.85 percent and the fund starts at around $ 2 million in assets.
Why now an XRP ETF?
Is this a good time for an XRP ETF? Opinions are shared, but according to Sal Gilbertie, CEO of Teucrium, the time is just right. He says Opposite Bloomberg:
“What is a better time to launch a product than if the prices are low?”
It relates to the unrest in the markets, including through the new American tariffs on foreign trade.
Gilbertie also says that there is a great demand for an ETF for XRP gives. The fact that interest is increasing right now is the result of the favorable output of the legal dispute between Ripple and the American stock exchange supervision.
The legal dispute between Ripple and the Securities and Exchange Commission (SEC) lasted over four years. The question was whether XRP is a security. In the last month, this legal dispute finally came to an end.
XRP may still get a spot ETF
Eric Bachunas, the ETF expert at Bloomberg, calls It “very strange” that the first ETF for XRP is a lever version.
Usually a spot ETF is approved first, with the fund simply pursuing the course of the coin. Nevertheless, Eric thinks that the chance of a spot ETF is high.
There are currently several Spot-XRP ETF applications at the SEC, including big names such as Grayscale, Bitwise and Franklin Templeton. According to the market forecasts of Polymarket the likelihood is 75 percent that a spot ETF will be approved in 2025.