ProShares to launch three XRP futures ETFs, mistakenly interpreted as spot ETF in "false alarm" as XRP derivatives lineup expands
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ProShares to launch three XRP futures ETFs, mistakenly interpreted as spot ETF in "false alarm" as XRP derivatives lineup expands
A news item about "SEC has approved ProShares Trust $XRP ETF listing" circulated in the market. However, as the original text used the generic category term "XRP ETF," it was temporarily misinterpreted as the approval of the first U.S. altcoin spot ETF, triggering short-term market volatility.
Navigating Web3 tides with focused insightsAuthor: Weilin, PANews
On the evening of April 27, news spread rapidly across the crypto community and markets that the U.S. Securities and Exchange Commission (SEC) had approved ProShares Trust's $XRP ETF for public listing on April 30. However, because the original article used the general term "XRP ETF," many users mistakenly believed this marked the approval of the first U.S. altcoin spot ETF following BTC and ETH spot ETFs, triggering a brief market reaction.
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 represents a significant addition to XRP’s financial product ecosystem, it does not carry the same market significance as the debut of the first altcoin spot ETF. The “false alarm” ultimately had no substantial impact on XRP’s price, only prompting a short-term minor uptick.
Three ProShares XRP Futures ETFs Set to Launch
According to public filings, 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 products were initially filed in January, and the SEC did not raise objections during its review period, effectively allowing them to proceed. Notably, futures-based ETFs offer exposure to the price movements of XRP futures contracts. ProShares’ ETFs will track XRP prices through an XRP index, meaning investors can speculate on XRP’s price direction without holding actual XRP tokens—unlike spot ETFs, which require direct ownership of the underlying asset.
It should be noted that while SEC filings permit these funds to become effective on that date, actual trading may not begin immediately, depending on exchange readiness and other operational factors.
XRP Futures ETF Lineup Expands; Spot ETF Still Awaits Approval
The three ProShares funds will become the second, third, and fourth XRP-linked ETFs in the U.S. market.
Earlier this month, Vermont-based asset manager Teucrium Investment Advisors LLC launched the first XRP ETF in the U.S., also offering leveraged exposure to XRP without directly holding the asset. The Teucrium 2x Long Daily XRP ETF (ticker: XXRP) officially debuted on April 8, aiming to deliver twice the daily return of XRP via swap agreements. The fund is structured as a daily-reset 2x leveraged trading instrument.
Teucrium CEO Gilbertie emphasized that the fund is not intended for long-term holding and warned that due to the compounding effects inherent in daily-reset leveraged products, the fund could lose value even in range-bound or slowly trending markets. He added that the product primarily targets aggressive traders bullish on XRP who lack access to leveraged positions through traditional margin accounts.
In response, Bloomberg senior ETF analyst Eric Balchunas commented on X: “Very strange—and possibly the first time ever—that the initial ETF for a new asset is leveraged. Though spot XRP ETFs haven’t been approved yet, we believe the likelihood is quite high.”
Currently, ProShares’ standalone application for a spot XRP ETF remains pending approval, with similar spot fund applications from Grayscale, 21Shares, and Bitwise also in the same regulatory review phase.
Leveraged ETFs Clearly Designed for Short-Term Trading
Market sentiment reacted only briefly to the announcement of ProShares’ upcoming leveraged/inverse XRP futures ETFs. According to CMC data, XRP was priced at $2.177 at 8:20 PM on April 27, reaching a short-term high of $2.2895 at 4:05 AM, representing about a 5% gain. By noon on April 28, the price had slightly pulled back to around $2.25, with overall movement remaining stable.
Crypto influencer Tu Ao Da Shi Xiong commented: “XRP leveraged/inverse ETFs are 'high-speed assets' designed specifically for short-term speculation, whereas BTC/ETH spot ETFs are 'low-speed stable assets' built for traditional investors seeking steady digital asset allocation. So in reality, these ETFs won’t drive large-scale, sustained capital inflows.”
Additionally, ProShares explicitly warns investors in its prospectus: “If held for more than one day, the returns of these ETFs may significantly deviate from the expected performance of the underlying index,” making them unsuitable for long-term holding.
Notably, XRP’s standing in the derivatives market is steadily rising. Recently, CME Group announced it will launch XRP futures on its derivatives exchange on May 19. As the largest U.S. derivatives exchange, CME already offers products linked to Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
Following the announcement, Ripple CEO Brad Garlinghouse expressed support for the upcoming CME XRP futures contract, calling it an important and exciting step reflecting continued growth in the XRP market. While acknowledging the move is somewhat delayed, he emphasized its significance, noting it marks recognition of XRP by mainstream financial markets. This development not only provides professional investors with regulated trading tools but could also pave the way for future spot XRP ETF approvals, validating XRP’s status as a mature and investable asset class.
In parallel, the world’s first spot XRP ETF has successfully launched in Brazil. On April 25, Hashdex issued the first XRP-backed spot ETF, managed by Genial Investimentos, which began trading on Brazil’s B3 stock exchange. The ETF, ticker XRPH11, tracks the Nasdaq XRP Reference Rate Index. According to Hashdex, the fund will allocate at least 95% of its net assets to XRP.
In summary, ProShares’ launch of three XRP futures ETFs adds more strategic options for market participants, particularly benefiting short-term, leveraged investors. However, from the perspective of medium- to long-term capital flows and value investing, the real focus remains on the eventual approval of a spot XRP ETF.
With the imminent launch of CME’s XRP futures and the successful debut of a spot XRP ETF in Brazil, XRP’s acceptance within the global financial system has taken another step forward. Should U.S. regulators eventually approve a spot XRP ETF, it could catalyze further progress.
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