Three XRP futures ETFs will be launched by ProShares Trust, providing exposure to XRP’s price movements through an index.
The launch of three XRP futures-based exchange-traded funds (ETFs) by ProShares Trust has been approved by the U.S. Securities and Exchange Commission (SEC), according to an SEC filing. It was on January 17, just days before the inauguration of the now crypto-friendly President Donald Trump, that the following ETFs were proposed by ProShares:
The second, third, and fourth XRP-related ETFs will be launched in the U.S. Trading of the first XRP futures ETF, introduced by Teucrium, was started at the New York Stock Exchange (NYSE) on April 8 and was met with a “terrific response.”
It should be noted that a futures-based ETF offers exposure to the price movements of XRP futures contracts. In other words, the price of XRP will be tracked by ProShares’ ETFs through the XRP Index. This indicates that, unlike a spot ETF — which would necessitate purchasing XRP tokens — a futures XRP ETF enables wagers to be placed on XRP’s price without the need to hold the actual token.
ProShares’ separate request for spot XRP ETFs is still under review by the SEC. Meanwhile, as the U.S. continues to delay, the first spot XRP ETF by Hashdex was launched for trading in Brazil earlier this week.
The importance of the launch of these XRP futures ETFs is not diminished, however. A regulated avenue to benefit from XRP’s price movements will be provided by these products, potentially paving the way for increased institutional interest.
The price of XRP was positively influenced by the futures-ETF approval, with an increase of 3.5% recorded over the past 24 hours, reaching $2.27 at the time of writing, according to CryptoSlate data. The market capitalization of XRP has been reported to exceed $312 billion.
It is worth noting that the prices of all other major market cap tokens, except for Bitcoin (which recorded a 0.11% increase), have declined over the past 24 hours. This suggests that the movement of XRP’s price has gone against the broader market, marking the largest price surge among the top 10 tokens.
The launch of XRP-related ETFs in the U.S. is being regarded as a major victory for Ripple, the company behind XRP. Ripple had been entangled in legal battles with the SEC for several years. However, the situation was altered after Trump assumed office and his nominee, Paul Atkins, was appointed as SEC chairman.
A significantly different approach from their predecessors has been adopted by Trump, who embraced a crypto-friendly position for his second term, and Atkins, a crypto advocate and former SEC commissioner. It was stated by Atkins during a roundtable organized by the SEC’s Crypto Task Force on Friday:
It is being indicated by the market itself that the current framework is in urgent need of attention.
It was further stated by Atkins that crypto innovation “had been stifled over the past several years” due to the SEC’s approach under former chair Gary Gensler.
In 2020, Ripple was sued by the SEC, with allegations that securities laws had been violated through the sale of XRP, which was considered by the agency to be an unregistered security.
A partial victory was secured by Ripple in July 2023 when it was ruled by the judge that XRP does not qualify as a security when sold on secondary markets such as exchanges. However, institutional sales of XRP were determined to involve unregistered securities — a fine of $125 million was imposed by the judge, although an appeal was filed by the SEC.
On March 19, it was announced by Ripple CEO Brad Garlinghouse that the SEC had agreed to withdraw the appeal, pending a Commission vote and approval. The case was declared “over” by Garlinghouse, who described the moment as a “historic victory.”
On April 10, a joint motion was filed by Ripple and the SEC to halt the lawsuit proceedings in order to negotiate settlement terms.
The resolution of the Ripple-SEC lawsuit is expected to have broader implications for the crypto market, as a precedent would be established to demonstrate that tokens traded on exchanges are not necessarily classified as securities.
