In a pivotal move for crypto investors, the U.S. Securities and Exchange Commission (SEC) has tacitly approved three XRP-focused exchange-traded funds (ETFs) from ProShares.
Slated to debut April 30, 2025, these futures-based funds mark a watershed moment for XRP, offering traders leveraged and inverse strategies without direct crypto exposure. The decision arrives just weeks after Ripple’s legal clash with regulators concluded, clearing a path for institutional adoption.
Three Funds, Three Strategies
ProShares will roll out the Ultra XRP ETF (2x leverage), Short XRP ETF (-1x), and UltraShort XRP ETF (-2x). Unlike spot ETFs, these funds track XRP’s price through cash-settled futures linked to the CME CF XRP-Dollar Reference Rate. The Ultra ETFs amplify gains or losses, while the short options profit from declines. However, daily rebalancing means returns may diverge from XRP’s long-term trends.
ProShare’s spot XRP ETF remains pending, alongside applications from Grayscale and others. Analysts speculate spot approvals could follow, with deadlines looming in late 2025.
Why Now?
The SEC’s nod follows Ripple’s March 2025 courtroom victory, which determined XRP isn’t a security in certain contexts. This resolution eased fears of regulatory crackdowns, emboldening firms to push crypto products. Additionally, President Trump’s administration has softened the SEC’s stance under Chairman Paul Atkins, a crypto advocate.
“The legal clarity was a game-changer,” said Bloomberg analyst Eric Balchunas. “Regulators now see XRP as less risky, even with ongoing appeals.”
Crypto Investment Boom
ProShares launches trails Teucrium’s 2x Long XRP ETF, which drew $5 million in volume on its April 2025 debut. Concurrently, CME Group plans XRP futures contracts for May 2025, mirroring products for Bitcoin and Ethereum. These derivatives bolster market infrastructure, often a precursor to spot ETF approvals.
XRP’s price jumped 9% last week to $2.27, backed by ETF optimism. JPMorgan forecasts $8 billion in inflows if spot ETFs materialise, though skeptics warn of volatility.
Risks and Rewards
ProShares warns these ETFs are “highly speculative,” with leverage magnifying losses. For instance, a 10% XRP drop could erase 20% in the UltraShort ETF. Daily rebalancing also erodes returns over time, making them unsuitable for passive investors.
“These aren’t buy-and-hold assets,” cautioned Dechert LLP legal advisor Mark Gilbert. “Investors must monitor positions daily to avoid surprises.”
What’s Next for XRP?
All eyes now turn to the SEC’s pending spot ETF decisions, including ProShares’ November 2025 deadline. Grayscale’s May 22 review could set a precedent. Balchunas estimates a 65-79% approval chance this year, citing XRP’s liquidity and CME’s surveillance safeguards.
Meanwhile, Ripple’s appeal ruling, expected mid-2025, may further clarify XRP’s status. A favourable outcome could trigger a domino effect, fast-tracking spot ETFs and institutional adoption.
A New Way for Crypto Investing
ProShare’s ETFs democratise access to XRP strategies once reserved for seasoned traders. Yet, the road ahead remains full of volatility and regulatory nuance. As crypto spreads to mainstream finance, these products will show a shifting landscape, one where risk and innovation walk hand in hand.
Investors eager to dive in should tread carefully: the SEC’s greenlight isn’t a guarantee of smooth sailing. But for XRP, the tide is unmistakably turning.
With reporting from Cryptopolitan and The Block. Prospectuses are available via SEC’s EDGAR database. Manage risks wisely.
