Tidal Trust II Seeks to Launch Leveraged ETFs for XRP and Solana
Tidal Trust II has submitted an application to the US Securities and Exchange Commission (SEC) to introduce two exchange-traded funds (ETFs) that aim to deliver daily returns of 150% to 200% on XRP and Solana. This initiative reflects a growing institutional interest in alternative cryptocurrencies, as the ETF market expands to provide access to high-cap digital assets amid ongoing regulatory processes.
The proposed ETFs, outlined in an August 19 Form N-1A filing, will not hold XRP or Solana directly but will rather invest in derivatives such as swaps, futures, and options linked to existing US-listed ETFs for these digital currencies. This structure is designed to facilitate both capital growth and income generation while utilising options strategies, including credit call spreads, to mitigate some of the risks associated with leveraged investments. Notably, this approach allows investors to take advantage of larger returns without the necessity of margin trading.
The demand for structured products related to XRP and Solana is already apparent. The Teucrium 2x Long Daily XRP ETF (XXRP) has recently exceeded US$400 million (approximately AU$608 million) in net assets, marking it as the first XRP product traded in the US to achieve this milestone. Similarly, the REX Shares Solana Staking ETF (SSK), launched just a couple of months ago, has attracted over US$160 million (around AU$243 million) since its inception.
Expanding Access to Altcoins
Tidal Trust’s latest proposal underscores the significant capital that appears to be poised for entry into the altcoin market, indicating a further step in the diversification of cryptocurrency-linked investment products. These funds contribute to an increasing array of offerings targeting both institutional and retail investors who seek regulated avenues to engage with high-cap cryptocurrencies.
It is worth noting that the SEC has recently postponed decisions on at least nine ETF applications, which are now expected to cluster around an October timeline for rulings. This delay has heightened anticipation within the market for approvals of new ETF products that could offer greater institutional and retail engagement with cryptocurrencies.
In summary, Tidal Trust II’s filing marks an important development in the ongoing evolution of cryptocurrency investments, signifying not only an appetite for altcoin exposure but also a movement towards more structured and regulated investment vehicles in the digital asset sphere.
