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Teucrium Investment Advisors, a US-based investment firm, is set to launch a leveraged exchange-traded fund (ETF) based on XRP. The fund aims to provide investors interested in Ripple’s token with a strategy that offers double leverage on returns. Named the “Teucrium 2x XRP ETF (XXRP),” the product allows investors aggressive exposure proportional to XRP’s price movements, while the trading process takes place on the New York Stock Exchange (NYSE Arca) as it awaits spot ETF approval for XRP.
Marking the First Leveraged XRP ETF Launch
Teucrium’s proposed fund will be the first leveraged ETF based on XRP. The 2x leverage means that a 1% change in the price of Ripple 
$2 will reflect a 2% change in the fund’s value. Although this strategy harbors high return potential for investors looking to take short-term positions, it equally carries significant risk. Investors need to exercise caution, particularly against sudden price fluctuations.
The management fee for the fund has been set at 1.85%, which may be considered high compared to similar products in the market. Teucrium highlights that the observed decline in Ripple network usage and the volatility of XRP prices could directly impact fund performance. The company emphasizes that the target audience for this product consists of investors focusing on short-term investment strategies.
Awaiting Approval for Spot XRP ETF
Teucrium’s introduction of a leveraged ETF comes as the approval process for XRP’s spot ETF continues. The U.S. Securities and Exchange Commission (SEC) is currently reviewing spot fund applications for XRP from several large investment firms, including WisdomTree, Bitwise, 21Shares, Canary Capital, and Franklin Templeton. While there is no definitive timeline for the approval process, market participants maintain cautious optimism for a positive outcome.
Bloomberg Intelligence expert Eric Balchunas described the launch of a leveraged ETF before spot ETF approval as “unusual.” He noted that such strategic moves could create different investment avenues under regulatory uncertainties. It is suggested that the fund primarily targets investors looking to engage in speculative positions in the current market.
Recently, XRP gained attention by increasing its value by 6.5% in a 24-hour period. This rise could be fueled by the overall recovery in the cryptocurrency market and heightened investor interest due to the new ETF developments. However, experts advise investors to consider both potential profits and risks associated with such products.
