XRP and Solana ETFs Gain Traction Amidst Declining XRP Price
By: Eliza Bennet
In a groundbreaking move, Tidal Trust II filed an application with the US Securities and Exchange Commission to introduce two new exchange-traded funds (ETFs) that will offer leveraged long exposure to XRP and Solana. According to the details in Form N-1A, these funds will utilize leveraging techniques to increase potential returns, offering daily exposure to these digital assets with leverage ratios ranging between 150% and 200%. Investors can anticipate growth tactics normally associated with aggressive trading, coupled with options-based strategies, like credit call spreads, that strive to balance the risks of leveraged positions.
Unlike directly purchasing XRP or SOL, these ETFs are set to primarily invest in derivatives. This includes involvement in swap agreements and options associated with US-listed XRP and SOL ETFs. To maximize potential returns while maintaining relative security, the funds might also allocate resources to cash-settled futures and various other exchange-traded products that track these specific crypto assets' market movements. This strategy is crafted to deliver both long-standing capital appreciation and current income, addressing a wide range of traditional investors.
The initiation of these ETFs arrives at an exciting juncture as regulatory progress is noted in the crypto finance sector. Analysts project that the US SEC's decision on altcoin ETFs, such as these, could drop as early as October. This anticipates a positive wave that has already been evidenced in the crypto market, drawing more attention towards structured products linked to these digital currencies. For instance, the Teucrium 2x Long Daily XRP ETF recently surged past $400 million in net assets, setting a precedent for XRP-associated traded funds. In a similar light, the newly introduced REX Shares Solana Staking ETF accumulated over $160 million in net inflows, despite being barely two months into operation.
Nonetheless, the broader landscape shows some challenges as XRP's current market conditions present a bearish scenario. XRP's price is indicating weakness below significant resistance levels at $2.950. The digital currency is struggling, failing to sustain momentum over the $2.820 support zones, and pushing traders to anticipate potential downward shifts. If XRP cannot break the resistance and continues its decline, attention could shift towards more robust supports around the $2.750 mark. This fluctuation illustrates how both new investment vehicles and traditional market indicators must be balanced for informed decision-making in this volatile domain.
