Author:
The U.S. Securities and Exchange Commission (SEC) has approved the launch of three XRP exchange-traded funds (ETFs) from ProShares, setting a public offering date of April 30, 2025.
However, unlike a spot ETF, which would hold XRP directly, ProShares’ offerings will provide exposure through derivatives, a structure that has raised eyebrows among analysts.
“This is NOT a spot XRP ETF,” noted ETF expert Nate Geraci in a post on X. “It will actually be several leveraged and inverse ETFs obtaining XRP exposure via derivatives.”
Still No Spot XRP ETF
The products include the Ultra XRP ETF, offering a 2x leverage on the daily returns of XRP future prices, the Short XRP ETF, offering inverse exposure, which will enable investors to profit from XRP’s price decline, and the Ultra Short XRP ETF, providing nearly twice the inverse (-2x) of the cryptocurrency’s daily performance.
The SEC’s decision to permit leveraged products before a spot ETF is unusual, as most crypto ETFs, including Bitcoin and Ethereum funds, followed the opposite trajectory. “Now, why are these being allowed before spot?” asked a perplexed Geraci.
Earlier this month, the regulator authorized the first-ever leveraged XRP product: Vermont-based Teucrium’s 2x Long Daily XRP ETF (XXRP), trading on NYSE Arca. Some market watchers have speculated that this sequence of events, first, Teucrium’s XXRP and now ProShares’ XRP ETF, could be a sign that the financial markets watchdog might be more comfortable signing off on derivatives-based exposure instead of direct custody of crypto assets.
“It might relate to regulatory comfort levels with derivatives versus holding the underlying asset directly,” said a user on X, answering Geraci’s question. “Or perhaps the demand for leveraged products is being tested before a spot ETF is considered.”
The approval also comes just weeks after the SEC settled its high-profile lawsuit against Ripple Labs, the company behind the token. The case dragged on for years and ended with a $50 million fine, far less than the SEC’s original demands, effectively clearing a major regulatory hurdle for the cryptocurrency.
Historic Milestone
ProShares, which manages over $60 billion in assets, is no stranger to crypto-based financial products, having made history in 2021 when it launched the first Bitcoin futures ETF (BITO). Its entry into the XRP space brings considerable clout and credibility.
Arthur, an XRP-focused commentator on X, called it a “historic milestone” for XRP’s integration into mainstream finance, opening the doors for easier access by banks, institutional investors, as well as retail traders.
“XRP is entering the big leagues,” he claimed, ticking off the various benefits that should come with the ETF, including regulatory validation and the possibility of “massive capital inflows.”
Meanwhile, in the markets, the token climbed 4.6% in the last 24 hours and is currently trading around $2.28 after ranging between $2.17 and $2.29. Zooming out to a weekly view, it gained 7.4%, slightly underperforming the rest of the crypto market’s 8.2% rise in that period.
Additionally, XRP registered a 5% uptick across the previous 30 days, continuing a broader trend that has seen it surge more than 335% over the last year.
LIMITED OFFER for CryptoPotato readers at Bybit: Use this link to register and open a $500 FREE position on any coin!
