XRP Exchange-Traded Fund accumulates $67 million in assets under management, surpassing Ripple's price growth
The Teucrium 2x Long Daily XRP ETF, symbolized as XXRP, is experiencing a surge in asset inflows, reaching over $67 million in the last four weeks. Despite XRP's performance, the fund has outperformed its counterpart, with a 26% gain since inception compared to XRP's 16.4% rise.
This notable inflow could indicate a robust institutional demand for XRP ETFs. The U.S. Securities and Exchange Commission is reviewing no less than nine XRP ETFs from various companies, such as Bitwise, Canary, 21Shares, WisdomTree, Franklin Templeton, and Grayscale. JPMorgan predicts that these ETFs, if approved, could attract over $8 billion in the first year - surpassing Ethereum's inflows.
On the downside, XXRP's hefty 1.89% fee makes it quite costly compared to other leveraged ETFs, such as the Direxion Daily Semiconductor Bull 3x Shares ETF and ProShares UltraPro QQQ ETF, which charge 0.75% and 0.84%, respectively. As a result, a $10,000 investment will cost at least $189 annually.
Yet, investors seem unfazed and continue to pour money into XXRP, possibly due to the lack of direct spot XRP ETFs, growing institutional interest in digital assets, the fund's unique offering, and its regulated environment under NYSE Arca.
As for the future, potential growth for upcoming XRP ETFs seems promising, thanks to market interest, increased competition, and broader crypto adoption. However, the high fees and risks associated with leveraged products might deter some investors.
Background
The Teucrium 2x Long Daily XRP ETF, like other leveraged ETFs, carries high-risk, high-reward characteristics. For instance, the ProShares QQQ ETF and the ProShares UltraPro Short QQQ ETFs have shown dramatic performance over the past five years, with the former jumping by 261% while the latter plummeted by 98%. An XRP price crash could lead to more significant losses for XXRP ETF investors.
- The Teucrium 2x Long Daily XRP ETF, symbolized as XXRP, has experienced an influx of assets, reaching over $67 million in the last four weeks.
- Despite XRP's performance, the fund has outperformed its counterpart, with a 26% gain since inception compared to XRP's 16.4% rise.
- JPMorgan predicts that if approved, XRP ETFs could attract over $8 billion in the first year, surpassing Ethereum's inflows.
- The high fees of XXRP, at 1.89%, make it costly compared to other leveraged ETFs, such as the Direxion Daily Semiconductor Bull 3x Shares ETF and ProShares UltraPro QQQ ETF.
- Potential growth for upcoming XRP ETFs seems promising due to market interest, increased competition, and broader crypto adoption.
- However, the high fees and risks associated with leveraged products might deter some investors.
- The U.S. Securities and Exchange Commission is reviewing nine XRP ETFs from various companies including Bitwise, Canary, 21Shares, WisdomTree, Franklin Templeton, and Grayscale.
