ProShares will launch three XRP futures ETFs, which were misread as spot ETFs and triggered a "behind" and XRP derivatives lineup expands

Author: Weilin, PANews

On the evening of April 27, a news about "The Securities and Exchange Commission (SEC) approved the ProShares Trust $XRP ETF to be publicly listed on April 30" spread rapidly in the crypto community and market. However, since the original text is collectively referred to as the category "XRP ETF", many users once mistakenly believe that this is the approval of the first American altcoin spot ETF after BTC and ETH spot ETFs, which has aroused short-term emotional fluctuations in the market.

However, after verification, ProShares is not a spot ETF, but three futures-based XRP leveraged or reverse ETFs. Although this is an important addition to the XRP financial product system, it has not yet reached the market significance represented by the first altcoin spot ETF. This "laugh" ultimately did not have a substantial impact on XRP price, and only triggered a slight short-term increase.

Three ProShares XRP Futures ETFs to be listed soon

According to public information, ProShares will launch the following three new funds on April 30:

• Ultra XRP ETF: Provides 2x leverage XRP futures exposure
• Short XRP ETF: Provides 1x reverse XRP futures exposure
• Ultra Short XRP ETF: Provides 2x reverse XRP futures exposure

The three products were initially submitted in January this year, and the SEC did not object to the review period, but actually acquiesced to its launch. It is worth noting that futures-based ETFs provide exposure to price fluctuations in XRP futures contracts, and these ETFs from ProShares will track the price of XRP through the XRP index. This means that unlike spot ETFs that need to actually buy XRP tokens, futures XRP ETFs allow investors to bet on their price trends without holding XRP tokens.

Additionally, although the SEC documents allow these funds to take effect on that date, actual trading may not begin immediately, depending on the exchange's readiness and other operating factors.

The XRP futures ETF queue is expanded, and spot ETFs are still waiting

for approval.

These three ProShares funds will become the second, third and fourth ETF products with XRP as the target in the US market.

Earlier this month, Vermont-based asset management company Teucrium Investment Advisors LLC launched its first XRP ETF on the U.S. market, also providing leveraged exposure to XRP prices, but not holding the asset directly. The Teucrium 2x Long Daily XRP ETF (code: XXRP) was officially launched on April 8, aiming to achieve 2x the daily performance of XRP through swap contracts. The ETF is designed as a 2x leverage trading tool with a daily reset mechanism.

Teucrium CEO Gilbertie said the fund is not for long-term holdings and reminded that in consolidation or slow-volatility markets, the fund may experience loss of value due to the intraday compounding effect of leverage resetting products. Gilbertie also pointed out that the fund is mainly aimed at aggressive traders who are bullish on XRP but cannot obtain leverage exposure through traditional margin accounts.

Regarding this product, Bloomberg senior ETF analyst Eric Balchunas once posted on the X platform: "It's very strange (and maybe the first time it appears), that the first ETF of a new asset is actually leveraged. Although the spot XRP ETF has not been approved yet, we think the probability of approval is quite high."

At present, the spot XRP ETF application submitted by ProShares is still awaiting approval, and similar spot fund applications submitted by asset management companies such as Grayscale, 21Shares and Bitwise are also in the same approval stage .

Leveraged ETF short-term tools have obvious properties

For ProShares’ upcoming three leveraged/reverse XRP futures ETFs, market sentiment only fluctuates in the short term. CMC data shows that XRP quoted $2.177 at 8:20 pm on April 27, hitting a short-term high of $2.2895 at 4:05 AM, an increase of about 5%. As of noon on April 28, the price fell slightly to around US$2.25, and the overall trend was stable.

Crypto KOL Tu'ao Dashi Brother commented that "XRP leverage/reverse ETF is a 'high-speed asset' specially designed for short-term battles, while BTC/ETH spot ETF is a 'low-speed stable asset' designed for traditional investors to steadily allocate digital assets. So in fact, this ETF cannot achieve a large inflow of funds."

In addition, ProShares also clearly reminded investors in its prospectus: The prospectus of these three ETFs clearly warns in the original text: If the holding time exceeds one day, the returns may deviate seriously from the expected returns of the underlying index, so it is not suitable for long-term holding.

It is worth mentioning that XRP's position in the derivatives market is steadily increasing. Not long ago, CME Group announced that it will launch XRP futures products on its derivatives exchange on May 19. CME is the largest derivatives exchange in the United States and has launched related products of Bitcoin (BTC), Ethereum (ETH) and Solana (SOL).

Ripple CEO Brad Garlinghouse later recognized CME’s upcoming XRP futures contract, saying it was an important and exciting step for the continued growth of the XRP market, but pointed out that although the move has lagged behind in many aspects, it is of great significance, marking that XRP has gained recognition from mainstream financial markets. This move not only provides professional investors with regulated trading tools, but may also pave the way for the future launch of XRP spot ETFs, validating XRP’s position as a mature and investable asset class.

At the same time, the world's first spot XRP ETF was also successfully listed in Brazil. On April 25, the world's first spot ETF linked to XRP was issued by Hashdex, managed by Genial Investimentos, and started trading on the Brazilian Stock Exchange B3. The ETF code is XRPH11, tracking the Nasdaq XRP reference price index. According to Hashdex, the ETF will allocate at least 95% of its net assets to XRP.

In general, the three XRP futures ETFs launched by ProShares this time provide the market with more trading strategy options, especially suitable for investors who focus on short-term and leveraged investments. But from the perspective of medium- and long-term capital flows and value investment, the real focus is still on the final approval of the spot XRP ETF.

With the upcoming launch of CME XRP futures and the first listing of spot XRP ETFs in Brazil, XRP's acceptance in the global financial system has improved a new level. In the future, if US regulators release spot XRP ETFs, further progress may be brought.