Yet another XRP exchange-traded fund (ETF) filing has been submitted by Amplify Investments.
The proposed product is designed to provide investors with exposure to the price of the Ripple-linked cryptocurrency while simultaneously generating income by selling options.
Notably, the fund will not hold the token directly. Instead, it invests in those ETFs that track the token's spot price.
The ETF will be selling call options on XRP ETFs that are typically up to 10% above the current price. Investors will be able to get income based on the premium earned from selling the aforementioned options. Essentially, investors will be "renting out" some of their options to options buyers in exchange for cash.
For instance, if the XRP records a relatively small price gain, the fund will keep both the option premium and the underlying gain. If XRP rises by a lot, gains are capped at the strike price, so the upside is rather limited for investors. However, the premium paid to investors also cushions potential losses if XRP experiences a sharp downturn.
Potential risks associated with the new ETF include general investment risks as well as XRP-specific risks such as high volatility, supply shocks, potential network risks, and so on.
XRP ETF race
In the U.S., there are only leveraged or futures-based XRP ETFs, including Teucrium 2x Long Daily XRP ETF and ProShares Ultra XRP ETF.
However, the SEC is widely expected to approve a slew of spot XRP ETFs from such issuers as Franklin Templeton, Bitwise, 21Shares, and Grayscale later this year.
According to Polymarket bettors, XRP ETFs have an 86% chance of being approved by the SEC in 2025.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team