Approval of XRP Futures ETF May Trigger Price Increase
On April 27, 2025, the U.S. Securities and Exchange Commission (SEC) approved ProShares Trust to launch three XRP futures exchange-traded funds (ETFs): ProShares Ultra XRP ETF, ProShares UltraShort XRP ETF, and ProShares Short XRP ETF. These three funds offer 2x long, 2x short, and 1x short exposure to XRP futures prices, providing investors with a regulated tool to bet on price trends without needing to hold XRP directly. Set to be listed on NYSE Arca on April 30, these ETFs not only mark another breakthrough for XRP into mainstream finance but also spark heated discussions in the market regarding the approval process for crypto ETFs.
Spot ETFs hold crypto assets directly, making their prices more closely aligned with real-time markets, and typically have lower management fees (0.2%-0.5%), making them more attractive to both retail and institutional investors. The approval of spot ETFs is more challenging, as the SEC has long been concerned about the risks of market manipulation, insufficient liquidity, and investor protection issues in the crypto market. The approval of Bitcoin spot ETFs in January 2024 (including products from Grayscale and BlackRock) attracted over $50 billion in inflows, causing BTC prices to rise from $42,000 to $70,000 within three months. Ethereum spot ETF was approved in July 2024, with inflows of about $10 billion, leading to a 20% increase in ETH prices.
The advantages of spot ETFs far exceed those of futures ETFs for three reasons:
Direct price linkage: Spot ETFs hold assets directly, reducing the impact of futures premiums or discounts, resulting in more transparent pricing. Institutional appeal: Spot ETFs align better with traditional asset allocation needs, attracting large players like pension funds and hedge funds. Market confidence: Spot ETFs are seen as a symbol of the 'legitimization' of crypto assets, boosting community morale and long-term investment.
The application for an XRP spot ETF (submitted by Grayscale, Bitwise, etc.) is still under review. Polymarket predicts a 75% chance of approval by the end of 2025, driven by the success of futures ETFs. If the XRP spot ETF is approved, it is expected to attract $5-10 billion in funds, with XRP prices potentially breaking $3.
