The debut of the first American spot exchange-traded fund (ETF) providing direct exposure to XRP took place on Thursday, marking a significant milestone in the cryptocurrency landscape. The Rex-Osprey XRP ETF, launched by Rex Shares and Osprey Funds, has already generated considerable interest, with initial trading volume soaring to nearly $25 million within just 90 minutes of its introduction.
Analyst Eric Balchunas from Bloomberg expressed his astonishment regarding the ETF’s trading activity, noting that the volume significantly surpassed expectations, especially when compared to previous XRP futures ETFs. He remarked that the trading volume during the initial phase was roughly five times higher than any XRP futures ETF had achieved on its first day.
As a result of this surge in investor interest, the price of XRP itself experienced an increase. According to data from CoinGecko, XRP was trading at approximately $3.11, reflecting a 2% rise over a 24-hour period. This ascent brings XRP closer to its previous all-time high of $3.65, established in July, though it still sits around 15% below that benchmark. Moreover, sentiment among users on the Myriad platform indicates a growing optimism, with a majority believing that XRP could climb to a new high of $4.
XRP, created by the fintech company Ripple, is designed for use by institutions and banks looking for efficient money transfer solutions. The introduction of the Rex-Osprey XRP ETF coincided with the launch of another groundbreaking offering, the DOJE ETF, which gives investors exposure to Dogecoin. The performance of DOJE has also been impressive, achieving approximately $6 million in trading volume within the first hour of trading, far exceeding analyst expectations.
Both the Rex-Osprey XRP ETF and the Dogecoin ETF differ from previously launched Bitcoin and Ethereum ETFs, primarily in their regulatory framework. These altcoin ETFs are set up via the Investment Company Act of 1940, in distinction to the Securities Act of 1933 under which earlier funds were established. This regulatory shift may help pave the way for more altcoin ETFs in the future, particularly following a recent SEC order that established generic listing standards for commodity-based funds.
As the landscape evolves, XRP faces the potential for further price increases, with many analysts and traders keenly observing market trends and user sentiment in the cryptocurrency ecosystem.
