Tidal Trust II submitted to the SEC the Post-Effective Amendment Form N-1A to register the Defiance Leveraged Long + Income XRP ETF. Additionally, a similar leveraged ETF for Solana (SOL) was included.
This suggests that Wall Street-backed cryptocurrency investment products are expanding beyond Bitcoin and Ethereum to include altcoins like XRP and SOL.
The new ETF offers leveraged exposure of 150% to 200% to daily price fluctuations of XRP. Additionally, it uses an income strategy based on options. This setup aims to generate higher returns and stable cash flow for investors seeking specific exposure without using margin accounts.
It is noteworthy that the primary objective of this product is to achieve long-term capital growth, while the generation of current income is a secondary goal. To achieve these objectives, the funds employ a strategy that expands exposure to the underlying asset. They also use a method called credit spread to generate additional income. This would also help reduce the risks associated with leverage.
With this product, pension funds, insurers, and retirement portfolios could interact with XRP more broadly. Additionally, it could increase trading volume and modify market liquidity. This comes after NYSE Arca's approval earlier this year for the listing of Teucrium's 2x Long Daily XRP ETF.
Ripple has continued to experience bullish momentum since the conclusion of the XRP lawsuit. For example, the SEC lifted the five-year fundraising cap on Ripple. With this modification, the company can now raise an unlimited amount of money from accredited investors without having to register with the SEC. This could significantly increase its funding options.
Although the SEC delayed decisions on several spot XRP ETF proposals from many companies, postponing final resolutions until October, ETF analyst Nate Geraci has suggested that final approvals could come by then, as it is the deadline.
SEC Chairman Paul Atkins recently stated that very few tokens should be classified as securities, which constitutes another encouraging sign. This change represents a significant shift from the traditionally strict approach of the regulator. Additionally, he introduced the Crypto Project, an initiative to update securities laws to support technology-based financial markets.
The submission by Tidal Trust II shows how quickly the landscape of digital asset investment is changing. Meanwhile, the Teucrium product is already showing strong demand, attracting over $284 million in assets in four months. It also surpassed $400 million in August. This suggests that there are more investors interested in leveraged XRP products.
