All You Should Understand

Summary

Teucrium’s Groundbreaking Move

Over the last year, various firms have pursued the creation of an exchange-traded fund (ETF) in the United States that would monitor the performance of Ripple’s cryptocurrency. Recently, Teucrium, an asset management firm based in Vermont, made waves by launching the first of this kind in the US.

Their product, known as the Teucrium 2x Long Daily XRP ETF (XXRP), made its debut on NYSE Arca, providing investors with leveraged exposure to the daily fluctuations of the cryptocurrency’s value. It experienced a promising start, gathering around $5 million in trading volume on its first day.

Recently, the US Securities and Exchange Commission (SEC) granted approval for three additional XRP ETFs that are being developed by ProShares.

The Ultra XRP ETF, Short XRP ETF, and Ultra Short XRP ETF were initially expected to launch on April 30, but James Seyffart, a research analyst at Bloomberg Intelligence, clarified that the timeframe is likely to be “short or possibly medium term.”

Recent updates from the regulatory body indicate that these ETFs are set to become available on May 14.

Both Teucrium and ProShares’ offerings are based on futures, enabling investors to engage with XRP’s price movements via derivatives. Unlike spot ETFs, these do not hold the actual tokens, raising anticipation for when a spot ETF may finally launch in the United States.

Awaiting SEC Decisions

Among the prominent firms vying for a spot XRP ETF approval are Grayscale, Franklin Templeton, 21Shares, WisdomTree, and Bitwise.

If approved by the SEC, such a product would simplify the process for investors to access Ripple’s native cryptocurrency. Buying a spot ETF involves a similar process to acquiring stocks, facilitated through accredited brokerage accounts. Subsequently, investors will own shares in the fund, which then acquires and secures the actual cryptocurrency to support those shares.

Recently, the SEC experienced a significant leadership transition, with Paul Atkins stepping in as the new Chairman. His past pro-crypto inclinations have fueled optimism among the Ripple community regarding the potential approval of a spot XRP ETF.

However, the SEC has dampened those expectations for now. It postponed its decision regarding Franklin Templeton’s proposal, setting a new review date for June 17. Eleanor Terrett from Fox Business highlighted that this date is “intermediate,” indicating further delays may not be unexpected.

Despite the SEC’s recent developments, the probability of approval remains favorable. Eric Balchunas, a Senior ETF analyst at Bloomberg, estimates an 85% likelihood of a product launching by 2025. At the same time, Polymarket assigns an approximate 80% chance.