Volatility Shares Launches First Non-Leveraged XRP Futures ETF in the US
Volatility Shares has made a significant advancement in the cryptocurrency exchange-traded fund (ETF) landscape by introducing the US’s inaugural non-leveraged XRP futures ETF, trading under the ticker "$XRPI" on Nasdaq. This product stands out as it does not directly invest in XRP but instead focuses on futures contracts associated with the digital asset.
Key Features of the $XRPI ETF:
- The ETF aims to invest at least 80% of its total assets in XRP futures contracts and XRP-linked exchange-traded products (ETPs) via a subsidiary based in the Cayman Islands.
- The primary trading of these futures contracts is set to occur on the Chicago Mercantile Exchange (CME).
- This initiative is part of Volatility Shares Trust’s broadening portfolio, which could also include a 2x leveraged ETF, amplifying daily performance based on XRP futures.
Bloomberg ETF analyst Eric Balchunas noted this launch as a historic moment in ETF offerings, highlighting the growing interest in crypto-related financial products in anticipation of more regulatory approvals for spot ETF products.
Stagnant XRP Price Amidst Industry Developments
In an unexpected twist, despite the introduction of the $XRPI ETF and other positive regulatory movements, the price of XRP has been largely stagnant, hovering around US$2.50 (approximately AU$3.90) over the past few months. This sluggish performance comes even as the broader cryptocurrency market experiences a resurgence, driven primarily by Bitcoin reaching new all-time highs.
XRP price. Source: CoinGecko.
Interestingly, many analysts have suggested that XRP’s previous achievements, including being named a US Digital Asset Reserve candidate and the resolution of its long-standing legal conflict with the SEC, might have already been factored into its market performance. Despite these favourable developments, XRP struggles to gain momentum compared to emerging trends in the cryptocurrency sector.
Surge in XRP Futures Open Interest
An intriguing factor is the recent uptick in open interest (OI) for XRP futures, which reached 923 million tokens on May 22, marking a 31% increase over a fortnight. This surge translates to an impressive US$2.2 billion (about AU$3.43 billion) in leveraged positions. While this reflects growing speculation among traders, it does not necessarily indicate a bullish sentiment, as futures markets allow for both long and short positions.
In summary, while the launch of the first non-leveraged XRP futures ETF is a significant milestone in the realm of cryptocurrency investments, the stagnant price of XRP amid broader market rallies raises questions about investor sentiment and market dynamics. As Ripple continues to expand its operations, including new initiatives in the UAE facilitated by its DFSA licence, the future trajectory of XRP remains closely watched by investors and analysts alike.
