The first-ever XRP exchange-traded fund (ETF) is set to debut in the U.S. on Tuesday under the XXRP ticker.
The leveraged product, offered by Teucrium, will provide twice the daily performance of XRP. For example, if XRP’s price increases by 10% in a single day, the ETF is expected to rise by roughly 20% (before accounting for fees and expenses).
However, the ETF’s returns reset daily, making it more suited for short-term trading by experienced market participants seeking to capitalize on price volatility.
This ETF will not offer direct exposure to XRP itself. Instead, it will use swaps to mirror the token’s performance. This structure means investors need to be mindful of the compounding effect. If the ETF gains 10% one day and drops 10% the next, investors would still experience a loss.
Teucrium’s prospectus warns that if XRP’s annualized volatility reaches 100%, the ETF’s losses could total 63.2%. Thus, even if XRP performs well in the long term, high volatility could erode returns.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
Source: https://coindoo.com/first-ever-xrp-crypto-etf-launches-in-u-s-today/