Teucrium Launches First XRP-Related ETF on NYSE Arca
Teucrium, an asset management company based in the United States, has officially launched the first exchange-traded fund (ETF) related to Ripple (XRP) on the NYSE Arca trading platform, under the trading code XXRP.
(Background: Ripple’s solid establishment in the U.S.: SEC lawsuit concludes, initiating major business operations)
The first XRP-related exchange-traded fund (ETF) in the United States is officially listed! According to information from Teucrium Investment Advisors LLC, headquartered in Vermont, the company has launched the first ETF related to Ripple (XRP) on the NYSE Arca trading platform, with the trading code XXRP.
Leveraged ETF
However, it is important to note that XXRP is not the “spot” XRP ETF that investors have been eagerly anticipating; it is a “leveraged” ETF designed to provide investment returns equivalent to twice the daily price performance of XRP. Teucrium clearly states on its official website:
If you have a strong short-term belief about the price of XRP, you might consider exploring Teucrium 2x Long Daily XRP ETF.
Additionally, according to the product description, XXRP has a management fee of 1.85% and will distribute earnings monthly. On the ETF list of the major U.S. securities depository and clearing corporation, the Depository Trust and Clearing Corporation (DTCC), Teucrium’s XXRP is currently the only fund related to XRP, highlighting its uniqueness in the market.
Why Not a Spot ETF?
Generally speaking, the first ETF for a new asset class is usually a spot product intended to directly track the price of the underlying asset. Eric Balchunas, a senior ETF analyst at Bloomberg, commented on the X platform, stating:
A 2x XRP ETF is being launched in the U.S., which is the first XRP ETF in the market. But it is very strange (perhaps unprecedented) that the first ETF for a new asset is actually leveraged. The spot XRP has still not been approved, although we believe the likelihood of approval is quite high.
Balchunas’s comments highlight a common question in the market: why did a leveraged ETF launch before a spot ETF? Speculation suggests that this may relate to the attitude of regulators, the strategies of issuers, or specific market demands—since leveraged ETFs are typically based on futures contracts, and the U.S. Securities and Exchange Commission (SEC) is relatively more accepting of cryptocurrency ETFs based on regulated futures markets. In contrast, spot ETFs directly hold the cryptocurrency itself, and the SEC still has more concerns regarding the regulation of the spot market, custody security, and market manipulation.
When Will the Spot XRP ETF Launch?
Despite the emergence of leveraged ETFs, the market remains more focused on the progress of the spot XRP ETF. Currently, several U.S. asset management companies, including Grayscale and Bitwise, have submitted applications for a spot XRP ETF to the SEC. Earlier this year, the SEC confirmed that it has acknowledged receiving some of these applications, which is seen as a positive signal that the review process is progressing.
At the same time, the protracted litigation between Ripple and the SEC is nearing its end. At the end of last month, Ripple’s General Counsel Stuart Alderoty announced that Ripple Labs and the SEC have reached a preliminary settlement agreement, which is expected to involve both parties withdrawing their appeals, with the SEC returning $75 million of the $125 million penalty that Ripple paid last year, retaining only $50 million to conclude the matter.
Now that the first ETF directly related to XRP has been launched in the U.S., the possibility of the spot XRP ETF being approved has increased once again. As Nate Geraci, President of The ETF Store, commented previously:
With the conclusion of the Ripple case, it clearly means that the approval of the XRP spot ETF is just a matter of time.
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