Teucrium Investment Advisors LLC is preparing to launch the first leveraged XRP exchange-traded fund (ETF) in the U.S., marking a milestone for cryptocurrency investment products. The Securities and Exchange Commission (SEC) has approved the fund, which will trade under the ticker XXRP on NYSE Arca starting April 8, 2025.
Key Features of the Teucrium 2x Long Daily XRP ETF
2x Daily Leverage: The ETF aims to deliver twice the daily return of XRP (XRP) using swap agreements.
- Example: A 1% rise in XRP yields a 2% gain for the ETF, while a 1% drop results in a 2% loss.
- Management Fee: 1.89% (as per the prospectus).
- Target Audience: Short-term traders with strong views on XRP’s daily price movements.
Benchmarking and Pricing Mechanism
Teucrium will utilize:
- CME CF XRP-Dollar Reference Rate.
A basket of European XRP ETPs (e.g., 21Shares, Bitwise, WisdomTree, CoinShares) for swap pricing.
- These serve as initial benchmarks due to the absence of U.S. spot XRP ETFs.
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Teucrium’s Crypto ETF Expertise
The Vermont-based firm, managing $311 million in assets, previously launched a Bitcoin futures ETF in 2022 under the Securities Act of 1933. Upcoming plans include a 2x Short Daily XRP ETF for bearish traders.
Industry Reaction
Eric Balchunas, Bloomberg ETF analyst, noted the rarity of a leveraged ETF preceding a spot product:
"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."
Regulatory Context and Future Outlook
The launch follows Ripple Labs’ $50 million settlement with the SEC, resolving XRP’s classification dispute. Ripple CEO Brad Garlinghouse anticipates spot XRP ETFs by late 2025, with filings from:
- Bitwise
- 21Shares
- Grayscale
- Franklin Templeton
FAQs
1. What is the Teucrium 2x Long Daily XRP ETF?
A leveraged ETF designed to double XRP’s daily returns using derivatives like swaps.
2. How does the ETF handle losses?
It mirrors XRP’s daily declines at 2x the rate (e.g., a 1% drop becomes a 2% loss).
3. Why use European ETPs for pricing?
No U.S. spot XRP ETFs exist; European products provide established benchmarks.
4. When might spot XRP ETFs launch?
Garlinghouse predicts H2 2025, pending SEC approvals.
5. Which firms are seeking spot XRP ETFs?
Bitwise, Grayscale, and WisdomTree are among the applicants.
6. Is this ETF suitable for long-term investors?
No—it’s optimized for short-term trading due to volatility decay risks.
Keywords: XRP ETF, leveraged crypto ETF, Teucrium, SEC approval, Ripple settlement, spot XRP ETF, cryptocurrency investment
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