Amplify Files for First XRP Income ETF With Options Strategy

Key Insights:

• Amplify has submitted the first XRP option income ETF with the SEC.
• The fund will use a covered-call strategy to generate monthly payouts.
• Unlike a spot ETF, it avoids custody risks by tracking XRP-linked instruments.

Asset manager Amplify Investments has submitted a proposal to the US Securities and Exchange Commission (SEC) for launching the first XRP-based “option income” exchange-traded fund (ETF).

The Illinois-based asset manager has filed to list the fund on the Cboe BZX Exchange. The fund aims to track XRP’s price and generate a regular income stream through a covered call options strategy.

Simply put, it will layer a conservative income on top of crypto’s volatility, funding monthly payouts via option sales.

Market observers note that crypto funds using derivatives have historically fared better with regulators than those holding digital assets directly.

In fact, the filing arrives amid a wave of crypto ETF hopefuls and growing institutional interest in XRP following regulatory clarity in recent months.

Amplify’s Proposes XRP Monthly Option Income ETF

Amplify’s newly filed XRP Monthly Option Income ETF is designed to deliver both exposure to XRP and regular income via a covered-call strategy.

In practice, the fund would track XRP’s price via XRP-linked instruments rather than holding the token outright, then systematically sell call options on those holdings to collect premium income.

Each option cycle typically lasts a few weeks, after which the strategy will reset; a model that prioritizes steady income over maximizing price gains.

According to the prospectus, at least 80% of the fund’s assets will be tied to the XRP price. The remaining 20% will sit in US Treasuries or cash for stability and collateral purposes.

Since this ETF does not invest directly in XRP, it avoids some of the custody and regulatory hurdles that spot crypto funds face.

The SEC has yet to greenlight any spot XRP fund, even after Ripple’s partial courtroom victory clarified aspects of XRP’s legal status.

But the agency has shown comfort with derivatives-based crypto products in the past, as these operate within regulated commodities markets.

Meanwhile, corporate adoption of XRP has started to pick up pace, as Japanese gaming giant Gumi recently announced its plan to buy ¥2.5 billion worth of XRP.

Market commentators are highlighting the company’s strategy, stating that Gumi is stockpiling XRP for utility and Bitcoin as a treasury asset.

Why an XRP Income ETF Could Attract New Investors

For investors, the proposed fund opens a new avenue to gain exposure to XRP with an attached income stream.

By selling call options on its XRP positions, the fund would generate premiums that are paid out as distributions. This means that even if XRP’s price remains flat, investors could still receive a cash flow.

Crypto enthusiasts think that this feature could attract new investors who were previously hesitant. Many conservative portfolio managers can potentially consider diversifying into the new XRP product.

Similar covered-call funds have seen encouraging results in the Web3 space. For example, Bitcoin option-income ETFs launched in the past year and already have tens of millions in assets under management.

One Bitcoin high income ETF has attracted nearly $600 million in assets within its first year, highlighting the sheer demand for yield-focused crypto products.

Amplify’s XRP ETF could bring that formula to the world’s fourth-largest cryptocurrency. If approved, it would be the first real opportunity for investors to earn passive income on XRP via a US-regulated vehicle.