The US is present today in the first fund cited in the Stock Market (ETF) linked to XRP, a cryptocurrency issued by Ripple Labs.
Alternative Asset Manager Teucrium Investment Advisors is behind this initiative. Introducing leveraged products based on the fourth largest cryptocurrency futures market By market capitalization.
The background to being baptized as the “Teucrium 2x Tayry XRP ETF” is cited in an XXRP ticket, attempting to double the daily performance of XRP. It is designed specifically for short-term operations, so its purpose is to achieve this objective every dayas explained on the manager’s website.
However, due to the impact of daily capitalization, its long-term performance can be significantly diverted from twice the XRP performance. With an expense ratio of 1.85%, ETFs are presented as an option focused on investors willing to undertake risk in a short time perspective.
To make this ETF operation more clear, we’ll proceed with the example. If XRP rises 5% in a day, the price of this ETF will rise by 10%. This shows double leverage in XRP profit scenarios. Also, if XRP drops by 5%, ETF prices should fall by 10%. This shows double leverage in XRP loss scenarios.
For a portion of Teucrium, a company founded in 2010 that managed $311 million last week, Add this product to 12 ETF portfolios in alternative markets.
Launch has shown precedent since XRP With $110 million capitalization, it will become the country’s first cryptocurrency ETF.
Amazing new ETF
This announcement is not noticed by analysts. Eric Balchunas, ETF specialist at Bloomberg Intelligence, points out that it is “very weird” that the first ETF linked to XRP is leverage rather than cash (spot).
“Maybe this is novelty,” he adds. The XRP ETF spot emphasizes that approval is still pending, but that there are “many possibilities for success.”.
Currently, the US Securities and Securities Commission (SEC) is assessing six ETFs against cash proposals that try to faithfully replicate the current XRP prices in the market, as reported by Cryptoics.
This contrast between approaches highlights differences between both types of funding. Teucrium ETF is committed to amplifying daily movements, but the ETF spot aims to directly reflect the value of XRP.
To date, there is no evidence that there is another double ETF based on XRP futures such as Teucrium around the world. Products linked to XRP in other markets such as Europe and Brazil are primarily cash.
Regulation Context and XRP Volatility
This path to launch finds its roots in recent changes in the American regulatory panorama.
Donald Trump’s arrival at the US presidency has fueled growth expectations and led cryptocurrency to a historic up to $3.39 in January.
This added that Gary Gensler of the Sec’s departure opened a window of opportunity for Ripple Labs. Rejection of demand for the company for the commercialization of XRP.
Since then, its prices have ranged between $2-3 until the beginning of April. However, the current volatility wasn’t long. Trump-driven tariff measures have affected the market XRP fell to $1.6 yesterday. Today, cryptocurrency shows signs of recovery and quotes at $1.9, but far (50%) on record.
(tagstotranslate) Cryptocurrency
