In a significant move for the cryptocurrency market, Vermont-based asset manager Teucrium is launching the first XRP-based exchange-traded fund (ETF) in the U.S. today. Known as the Teucrium 2x Long Daily XRP ETF (XXRP), this leveraged product offers investors twice the daily performance of XRP, a noteworthy introduction that comes even before a spot version has received approval.
Why a Leveraged ETF First?
The launch of the XXRP ETF is taking place amid increasing interest in XRP ETFs, with several sizable issuers including WisdomTree, Franklin Templeton, Canary Capital, and 21Shares currently awaiting review from the Securities and Exchange Commission (SEC). In a recent commentary on social media platform X, Bloomberg’s Eric Balchunas highlighted the unusual nature of this launch, as leveraged products typically follow the approval of spot ETFs. According to Balchunas, while the odds of spot XRP approval are looking promising, it has yet to be sanctioned by the SEC.
The SEC’s evolving stance on cryptocurrencies, following a reshuffle instigated by last year’s U.S. presidential election and several legal defeats, has contributed to an environment more conducive to crypto regulations. Recent developments include a decision to settle a protracted case against Ripple Labs, which created XRP, resulting in a reduced fine for the firm and likely boosting prospects for a future spot ETF approval.
Teucrium’s fund primarily targets short-term traders, imposing a management fee of 1.85%. However, the filing also took a cautious approach, highlighting the inherent risks associated with XRP’s well-known volatility and its recent declining performance. The demand for the product remains to be seen, especially considering that Ethereum ETFs have faced challenges while institutional interest has predominantly gravitated towards Bitcoin.
XRP Price Action: A Mixed Bag
As the XRP market prepares for the ETF debut, the asset is currently showing a mixed price trend. At the time of this report, XRP is trading at $1.87, demonstrating a 7% increase over the last 24 hours. Nevertheless, this short-term uptick is overshadowed by a more concerning picture across longer timeframes, with XRP having declined by 11.2% in the past week and dropping approximately 23% over the last two weeks. In the span of just one month, the token has lost nearly 20% of its value.
Despite these setbacks, it’s essential to contextualize XRP’s performance against the broader cryptocurrency market, which is down 8.2% in recent weeks. XRP’s losses are somewhat steeper; however, on a yearly basis, the token has risen impressively by 215%, largely fueled by favorable legal developments and growing speculation surrounding ETF approvals.
This launch not only opens new avenues for investors but also reflects the dynamic nature of the cryptocurrency regulatory landscape. As the market adapts to these changes, the performance of Teucrium’s leveraged ETF will be closely monitored by both traders and regulators alike.
