Asset manager Teucrium Investment Advisors is breaking new ground with the launch of the first leveraged XRP exchange-traded fund (ETF) in the United States. The XXRP ETF, which debuts on NYSE Arca on April 8, aims to deliver twice the daily performance of Ripple's XRP token.
The pioneering move comes as the cryptocurrency market awaits decisions on multiple spot XRP ETF applications currently under review by the Securities and Exchange Commission (SEC). Major players including WisdomTree, Bitwise, 21Shares, Canary Capital, and Franklin Templeton have submitted proposals for conventional XRP funds.
Bloomberg Senior ETF Analyst Eric Balchunas noted the unusual nature of a leveraged product launching before a spot ETF, calling it "very odd" and potentially unprecedented in the ETF market.
The new fund carries a management fee of 1.85% and is designed specifically for short-term trading. In its documentation, Teucrium highlighted potential risks including market volatility and possible declining usage of the XRP token.
This launch follows recent positive developments in the crypto space, including the SEC's decision to drop its case against Ripple Labs in March 2024. Ripple agreed to pay a $50 million fine to resolve the matter. The regulatory clarity has sparked increased interest in crypto-based investment products.
The timing aligns with broader market developments, as the SEC approved the first batch of spot Bitcoin ETFs in January 2024. This approval has encouraged investment firms to pursue ETF offerings tied to various alternative cryptocurrencies.
At the time of the announcement, XRP was trading at $1.87, representing a 3% decline over the previous 24-hour period.