Author: Weilin, PANews

On the evening of April 27, news spread rapidly in the crypto community and market that the "U.S. Securities and Exchange Commission (SEC) has approved ProShares Trust $XRP ETF to be publicly listed on April 30." However, due to the original wording referring to the general category "XRP ETF," many users mistakenly believed this was the first approval of a U.S. altcoin spot ETF following BTC and ETH spot ETFs, triggering a brief market sentiment fluctuation.

However, upon verification, it was confirmed that ProShares is not launching a spot ETF, but rather three leveraged or inverse ETFs based on XRP futures. While this is an important addition to the XRP financial product system, it does not carry the market significance represented by the first altcoin spot ETF approval. This "false alarm" ultimately did not have a substantial impact on XRP prices, only causing a slight short-term increase.

Three ProShares XRP Futures ETFs Set to Launch

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

• Ultra XRP ETF: Provides 2x leveraged exposure to XRP futures
• Short XRP ETF: Provides 1x inverse exposure to XRP futures
• Ultra Short XRP ETF: Provides 2x inverse exposure to XRP futures

These three products were initially submitted for application in January of this year, and the SEC did not raise any objections during the review period, effectively allowing their launch. It is worth noting that futures-based ETFs provide exposure to the price fluctuations of XRP futures contracts, and ProShares' ETFs will track the price of XRP through an XRP index. This means that, unlike spot ETFs that require actual purchase of XRP tokens, futures XRP ETFs allow investors to bet on price movements without holding XRP tokens.

Additionally, although SEC filings allow these funds to become effective on that date, actual trading may not begin immediately, depending on the readiness of the exchanges and other operational factors.

Expansion of XRP Futures ETF Lineup, Spot ETFs Still Awaiting Approval

These three ProShares funds will become the 2nd, 3rd, and 4th ETF products in the U.S. market based on XRP.

Earlier this month, Teucrium Investment Advisors LLC, based in Vermont, launched the first XRP ETF in the U.S. market, which also provides leveraged exposure to XRP prices but does not directly hold the asset. The Teucrium 2x Long Daily XRP ETF (ticker: XXRP) was officially launched on April 8, aiming to achieve 2x returns on XRP's daily performance through swap contracts. This ETF is designed as a 2x leveraged trading tool with a daily reset mechanism.

Teucrium CEO Gilbertie stated that this fund is not intended for long-term holding and warned that in a consolidating or slowly fluctuating market, the inherent compounding effect of leveraged daily reset products may lead to value loss. Gilbertie also noted that this fund is primarily aimed at aggressive traders who are bullish on XRP but cannot obtain leveraged exposure through traditional margin accounts.

Regarding this product, Bloomberg's senior ETF analyst Eric Balchunas commented on X platform, stating: "It's very strange (and possibly unprecedented) that the first ETF for a new asset is leveraged. While a spot XRP ETF has not yet been approved, we believe the chances of approval are quite high."

Currently, ProShares' standalone application for a spot XRP ETF is still awaiting approval, and similar spot fund applications from asset management companies like Grayscale, 21Shares, and Bitwise are also in the same approval stage.

Leveraged ETFs Clearly Designed as Short-Term Tools

For the three leveraged/inverse XRP futures ETFs that ProShares is about to launch, market sentiment only fluctuated in the short term. According to CMC data, XRP was quoted at $2.177 at 8:20 PM on April 27, reaching a short-term high of $2.2895 at 4:05 AM, an increase of about 5%. As of noon on April 28, the price slightly retreated to around $2.25, with overall trends remaining stable.

Crypto KOL "Big Lion" from Australia commented, "XRP leveraged/inverse ETFs are designed as 'high-speed assets' for short-term trading, while BTC/ETH spot ETFs are 'low-speed stable assets' designed for traditional investors to allocate digital assets steadily. So, in reality, this ETF cannot achieve significant capital inflow and accumulation."

Additionally, ProShares clearly warns investors in the prospectus: the prospectus for these three ETFs explicitly states that if held for more than one day, returns may deviate significantly from the expected returns of the underlying index, making them unsuitable for long-term holding.

It is worth mentioning that XRP's position in the derivatives market is steadily rising. Just recently, the 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 U.S. and currently offers related products for Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).

Subsequently, Ripple CEO Brad Garlinghouse expressed approval of the upcoming XRP futures contracts from CME, stating that this is an important and exciting step for the continued growth of the XRP market. However, he pointed out that although this move is somewhat delayed in many aspects, it is significant, marking XRP's recognition in mainstream financial markets. This not only provides regulated trading tools for professional investors but may also pave the way for the future launch of an XRP spot ETF, validating XRP's status as a mature and investable asset class.

Meanwhile, the world's first spot XRP ETF has also successfully launched in Brazil. On April 25, the world's first spot ETF linked to XRP was issued by Hashdex and managed by Genial Investimentos, starting trading on the Brazilian stock exchange B3. The ETF ticker is XRPH11, tracking the Nasdaq XRP Reference Price Index. According to Hashdex, this ETF will allocate at least 95% of its net assets to XRP.

Overall, the three XRP futures ETFs launched by ProShares provide the market with more trading strategy options, especially suitable for investors focusing on short-term, leveraged investments. However, from a medium to long-term capital flow and value investment perspective, the real focus remains on the final approval of the spot XRP ETF.

With the upcoming launch of CME XRP futures and the first listing of a spot XRP ETF in Brazil, XRP's acceptance in the global financial system has seen a new enhancement. In the future, if U.S. regulatory agencies approve a spot XRP ETF, it could lead to further progress.

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