- Teucrium has announced the launch of the first leveraged XRP exchange-traded fund (ETF) in the United States.
- This ETF that aims to double the daily returns of XRP.
Teucrium Investment Advisors LLC is introducing a groundbreaking financial product, the first leveraged XRP exchange-traded fund in the United States. The Securities and Exchange Commission (SEC) has given the green light, and the fund, named the Teucrium 2x Long Daily XRP ETF, will start trading on NYSE Arca under the ticker XXRP starting Tuesday, April 8, according to Bloomberg.
What This Means for Investors
This new ETF is designed for those who actively trade and have strong feelings about XRP’s daily price changes. The ETF uses swap agreements to aim for twice the daily return of XRP. This means if XRP goes up by 1%, the ETF aims to go up by 2%. On the flip side, if XRP drops, the ETF could lose twice as much. The ETF will have a management fee of 1.89%, as stated in the company’s documents.
To figure out the prices for these swaps, Teucrium will look at different indexes and ETPs, like the CME CF XRP-Dollar Reference Rate, and also XRP ETPs listed in Europe from companies like 21Shares and CoinShares. Since there aren’t any spot XRP ETFs in the U.S. yet, these will be used as starting points.
Teucrium, which manages $311 million in assets and is based in Vermont, knows its way around crypto ETFs. They launched a Bitcoin futures ETF in April 2022. They are also planning to launch a 2x Short Daily ETF, which would allow traders to make money when XRP’s price goes down.
Bloomberg ETF analyst Eric Balchunas noted that it’s rare for a leveraged product to be the first ETF for an asset. However, he believes that the chances of a spot XRP ETF being approved are still good, even though none are available right now.
A 2x XRP ETF is launching tomorrow in the U.S., the first-ever XRP ETF on the market. 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,
he stated.
This launch follows a recent $50 million settlement between Ripple Labs and the SEC, which resolved a long legal battle over how XRP should be classified. “Last week, the SEC agreed to drop its appeal without conditions. @Ripple has now agreed to drop its cross-appeal. The SEC will keep $50M of the $125M fine (already in an interest-bearing escrow in cash), with the balance returned to Ripple,” reported Stuart Alderoty, Chief legal officer at Ripple.
Now that there’s more regulatory clarity, Ripple CEO Brad Garlinghouse is increasingly optimistic about XRP ETFs. In an interview with Bloomberg in March, he predicted that spot XRP ETFs could appear in the second half of 2025.
I have immense confidence in the ETFs. I think there’s 11 different filings pending with the SEC to launch XRP ETFs. I think those will be live in the second half of this year,
he said.
Several asset managers, including Bitwise, 21Shares, and Franklin Templeton, have already applied to the SEC for the product.
Today XRP is trading at $1.88, up 4% in the last 24 hours, with a trading volume of $9.33B.