XRP-based Exchange-Traded Fund (ETF) surpasses $67 million in Assets Under Management (AUM) as its price demonstrates strong performance, outpacing Ripple's growth.
Taking Off: The XXRP ETF Gaining Traction in the Crypto Market
The freshly minted XXRP leveraged exchange-traded fund, symbolized as XXRP, is experiencing an uptick in asset inflows. Over the last four consecutive weeks, assets have skyrocketed from zero to a whopping $67 million.
The XXRP's performance outshines Ripple's XRP, soaring by 26% since inception, while XRP has seen a more modest 16.4% increase during the same period.
Intriguingly, despite having the ease of purchasing XRP tokens at no cost, investors shell out a premium for the fund, with an expense ratio of 1.89%. This figure is steep even when compared to other leveraged ETFs, such as the Direxion Daily Semiconductor Bull 3x Shares ETF, sporting a management fee of 0.75%, or the ProShares UltraPro QQQ ETF, boasting an expense ratio of 0.84%.
Such high fees mean that a $10,000 investment in XXRP sets investors back at least $189 yearly. However, sustained XXRP inflows indicate a robust institutional interest in XRP ETFs, with several upcomingX RP ETFs from Bitwise, Canary, 21Shares, WisdomTree, Franklin Templeton, and Grayscale currently under SEC review. According to JPMorgan estimates, these ETFs could draw in over $8 billion in the first year, potentially surpassing the inflow rate of Ethereum ETFs.
SoSoValue data reveal that spot Ethereum ETFs have garnered less than $2.5 billion in the first seven months. Much like other leveraged ETFs, XXRP presents a high-risk, high-reward investment opportunity, as it targets double the daily performance of XRP.
Case in point, the ProShares QQQ and ProShares UltraPro Short QQQ ETFs—offering leveraged exposure to the Nasdaq 100 Index—have seen astronomical returns. Over the past five years, TQQQ has jumped by 261%, while the Nasdaq 100 Index has risen by a more modest 127%. In contrast, SQQQ, providing leveraged short exposure to the Nasdaq 100 Index, tumbled by 98%. Consequently, a sharp dip in XRP prices would weigh heavily on XXRP ETF investors.
While somecrypto market stability concerns have been raised following theMantra collapse, theXXRP ETF sparks optimism among analysts, as it indicates growing institutional confidence in XRP. Key factors include the ETF's unique investment opportunity, clearer regulatory landscape for Ripple, increasing institutional interest in crypto, the ETF's outperformance, and its accessibility as a compliant and regulated XRP investment vehicle.
- The XXRP ETF, with a whopping $67 million in asset inflows over the last four weeks, has outperformed XRP, obtaining a 26% increase since inception.
- Investors are paying a premium for the XXRP fund, with an expense ratio of 1.89%, despite the ease of acquiring XRP tokens at no cost.
- The high fees for XXRP could mean a $189 annual expense for a $10,000 investment, but such inflows suggest robust institutional interest in XRP ETFs.
- Estimates indicate that upcoming XRP ETFs could draw in over $8 billion in the first year, potentially exceeding the inflow rate of Ethereum ETFs.
- XXRP, designed to offer twice the daily performance of XRP, presents a high-risk, high-reward investment opportunity, similar to other leveraged ETFs like ProShares QQQ and SQQQ, which have seen significant returns and losses over the past five years.
