Volatility Shares Proposes New ETF for XRP Bears

Volatility Shares, a well-known ETF issuer, recently filed for three new XRP-related Exchange-Traded Funds (ETFs).

One proposed fund is –1x XRP ETFs, allowing investors to bet against Ripple’s associated token XRP. If XRP’s price goes down, investors in this ETF could profit.

In addition, the company has also filed for a regular spot XRP ETF, which would hold XRP directly, and another ETF that would increase XRP’s daily price movement, making it riskier but potentially more rewarding.

Betting Against XRP: A First of Its Kind

The -1x XRP ETF is a rare product in the crypto market. While leveraged and spot ETFs are popular, inverse ETFs remain rare, especially for tokens like XRP. 

If approved, this ETF would let traders bet against XRP’s price in a regulated way without using complicated trading methods. The ETF will move opposite to XRP’s price. If XRP falls, the ETF rises, making it a good choice for traders who expect the asset to drop.

Other XRP ETFs Included in the Filing

Volatility Shares is not just focusing on betting against XRP. It has also applied for a spot in XRP ETF. This would allow investors to buy shares in a fund that holds XRP without needing to purchase and store the cryptocurrency itself. 

The company has also proposed a leveraged XRP ETF, which would double XRP’s price movements. If XRP rises, the ETF would rise twice as much; if XRP falls, it would fall twice as much.

This is not the first time Volatility Shares has made a big move in the ETF space. In June 2023, the company launched the first leveraged Bitcoin futures ETF before any spot Bitcoin ETFs were approved. Now, it is looking to do something similar with XRP.

However, these ETFs come with risks. Potential total supply changes could impact XRP’s price, XRP Ledger updates, or regulatory decisions from U.S. regulators. The company also warned about price manipulation risks in crypto markets, which has been a concern in crypto markets.

Will the SEC Approve an XRP ETF?

The U.S. Securities and Exchange Commission (SEC) recently acknowledged the filings for these XRP ETFs but has not decided yet. The agency is still in a legal battle with Ripple, which adds uncertainty to the approval process.

Traders on the betting platform Polymarket believe there is a 76% chance that an XRP ETF will be approved this year. However, expectations have flaunted over the past two months.

The SEC has until October 18 to decide. Meanwhile, Brazil has already approved a spot XRP ETF, showing that other countries are moving ahead with crypto investment products. Whether the U.S. follows suit remains to be seen.