ETF Spotlight: XXRP, Riding the XRP Wave With Leverage

The Teucrium 2x Long Daily XRP ETF (XXRP), launched on April 8, has garnered attention for its strong early performance, boosted by rising optimism in the cryptocurrency sector and growing speculation that the U.S. Securities and Exchange Commission (SEC) may approve a spot XRP ETF.  

As part of a broader rally in digital assets, XRP has gained traction, and XXRP—designed to deliver two times the daily exposure to XRP's price movements—has risen 9.7% over the past week of trading.  

With crypto prices rebounding amid renewed institutional interest and a shifting regulatory tone, some investors have turned to XXRP as a high-risk, high-reward play on XRP’s future.

Like all leveraged ETFs, XXRP comes with significant market and compounding risk. In this spotlight article, we’ll cover what XRP is, how the XXRP ETF works, the pros and cons of investing in it, and provide an outlook for XRP in 2025.

What Is XRP?

XRP is a digital currency developed by Ripple Labs that is designed to enable fast, cost-efficient, cross-border payments. Unlike Bitcoin, which relies on proof-of-work mining, XRP uses a consensus mechanism across a network of validators. Its main use case lies in financial institutions and remittance providers that seek to transfer value quickly and cheaply across borders.  

While XRP has faced regulatory challenges in the U.S.—most notably a long-running legal battle with the SEC—its global adoption continues, particularly in regions with less friction around crypto usage.

How the XXRP ETF Works

XXRP is a leveraged ETF that seeks to provide twice the daily return of XRP, rather than holding the token directly. It achieves this exposure through derivatives like total return swaps and futures contracts, making it a synthetic investment rather than a physical one.  

This structure means that while XXRP can deliver amplified short-term gains when XRP rises, it also poses significant risk due to daily rebalancing and compounding effects, which can cause returns to diverge from expectations over time—especially in volatile markets. As such, XXRP is best suited for sophisticated traders looking for tactical exposure, not long-term holders.

Pros and Cons of Investing in XXRP

While XXRP amplifies XRP returns and it stands to benefit greatly if the SEC approves a spot XRP ETF, the downside risks are also amplified, especially if there are regulatory setbacks for the cryptocurrency.

Pros

• Amplified returns during short-term uptrends in XRP
• Offers liquid, regulated market access to XRP exposure without needing a crypto wallet
• May benefit from tailwinds if a spot XRP ETF is approved

Cons

• High volatility and potential for steep losses in short timeframes
• Subject to decay from daily rebalancing, especially in choppy markets
• Does not hold actual XRP—exposure is derivative-based, adding counterparty and tracking risk

XRP and XXRP Outlook for 2025

Looking ahead, XRP's price in 2025 may hinge on several key factors: the potential SEC approval of a spot XRP ETF, a resolution of regulatory ambiguity and broader adoption of Ripple’s technology by financial institutions. If these trends continue to favor crypto integration into traditional finance, XRP could see sustained upside.  

Considering the downside risk, if regulatory setbacks or crypto market corrections occur, volatility will remain high and short-term declines can be sharp. For XXRP, specifically, these price swings may offer trading opportunities, but long-term investors should be wary. 

The leveraged nature of the fund magnifies both gains and losses, and poor timing can erode capital quickly—even if XRP’s long-term trend is upward.

As always, investors should carefully consider their risk tolerance and investment horizon before venturing into leveraged crypto ETFs like XXRP.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in crypto-related securities and leveraged ETFs involves elevated risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions. 

At the time of publication, Kent Thune held a position in XXRP.