U.S.-based ETF provider Volatility Shares has filed with the U.S. Securities and Exchange Commission (SEC) to launch a set of 5x leveraged exchange-traded funds (ETFs) for a slew of cryptocurrencies, including XRP.
Apart from individual cryptocurrencies, Volatility Shares has also filed to offer 5X ETF products for a wide range of stocks, including COIN (Coinbase), CRCL (Circle), GOOGL (Alphabet), and MSTR (MicroStrategy).
Insanely risky
As reported by U.Today, GraniteShares, another unorthodox issuer, recently filed for a 3x XRP ETF, but the latest offerings from the SEC definitely upped the ante.
A 5x XRP ETF would certainly be one of the riskiest and most volatile products available in the U.S.
For instance, if the XRP rises by 2% in a day, the ETF would aim to rise by 10%, but this, of course, also applies to potential price drops.
Of course, one should also take into account volatility decay and compounding risks since such ETFs reset leverage on a daily basis.
"They haven't even approved 3x, and VolShares is like, let's try 5x," Eric Balchunas commented.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team