#XRPETF ETF is an exchange-traded fund that uses XRP as its underlying asset. Below is a detailed introduction:

Definition and Operating Principles

• XRP ETF is a financial product that holds XRP as the underlying asset and issues fund shares. After investors purchase shares, they can trade these shares in the secondary market like stocks, thus indirectly gaining exposure to the price fluctuations of XRP without needing to directly purchase, store, or manage XRP.

• Its price is primarily determined by the value of XRP but is also influenced by factors such as the fund's net asset value (NAV). NAV is calculated by dividing the total value of XRP held by the fund by the number of ETF shares outstanding, providing a benchmark for the ETF's market price.

• When the market price of the ETF shares is higher than the NAV, authorized participants (APs) can buy XRP and redeem it with the fund in exchange for ETF shares, then sell these shares in the market at a premium; conversely, when the ETF share price is lower than the NAV, APs buy ETF shares and redeem them for XRP, then sell the XRP in the market. This arbitrage mechanism helps maintain the consistency of the ETF price with the NAV.