In a groundbreaking development for cryptocurrency investments, Teucrium Investment Advisors has announced the launch of the first-ever XRP exchange-traded fund (ETF) in the United States. The Teucrium 2x XRP ETF (XXRP) aims to offer investors 2x leveraged exposure to the Ripple token, widely known for its significant role in the digital asset sphere. This ETF is set to commence trading on the NYSE Arca on Tuesday, paving the way for a new investment avenue even before the approval of a standard ‘spot’ XRP ETF by regulators.
As noted by Bloomberg Intelligence analyst Eric Balchunas, it is peculiar but perhaps fitting that the inaugural ETF for an emerging asset like XRP is a leveraged product. Balchunas remarked on social media, “Very odd (maybe a first) that a new asset’s first ETF is leveraged. Spot XRP still not approved, although our odds are pretty high.” Typically, the launch of ETFs tracking nascent assets like cryptocurrencies begins with unleveraged ‘spot’ funds, which directly hold the underlying asset, before introducing more intricate leveraged options.
Teucrium has established a management fee of 1.85% for the XXRP ETF. However, the firm has warned potential investors about the inherent price volatility of XRP and the declining usage on the Ripple network, which could present obstacles to the fund’s performance. These concerns reflect broader apprehensions surrounding the adoption and stability of the XRP token in the market.
Ripple’s Legal Resolution Fuels ETF Momentum
The launch of Teucrium’s leveraged ETF comes at a time marked by a surge in applications for spot XRP ETFs that are currently under review by the Securities and Exchange Commission (SEC). Prominent fund managers, including WisdomTree, Bitwise, 21Shares, Canary Capital, and Franklin Templeton, have submitted proposals to introduce unleveraged XRP ETFs.
The SEC has acknowledged these applications, and its decisions in the months ahead could be pivotal, potentially clearing the way for a broader array of XRP investment options.
In the meantime, XRP has shown positive performance, up 6.5% in the last 24 hours, reflecting a wider upward trend in the cryptocurrency market. As the regulatory landscape evolves, investors remain keenly aware of the implications of these developments for both XRP and the broader digital asset market.
