XRP futures ETF approved: another milestone for the crypto market towards mainstream.

Written by: Luke, Mars Finance

On April 27, 2025, the U.S. Securities and Exchange Commission (SEC) approved ProShares Trust to launch three XRP futures exchange-traded funds (ETFs): ProShares Ultra XRP ETF, ProShares UltraShort XRP ETF, and ProShares Short XRP ETF. These three funds offer 2x long, 2x short, and 1x short returns on XRP futures prices, providing investors with a regulated tool to bet on price movements without directly holding XRP. Set to be listed on NYSE Arca on April 30, these ETFs not only mark another breakthrough for XRP into mainstream finance but have also sparked heated discussions in the market regarding the approval process for crypto ETFs.

XRP Futures ETF: Mechanism and Significance

Core Design of ETF

ProShares' three XRP futures ETFs cater to different investment strategies:

ProShares Ultrastrat XRP ETF: Pursues 2x positive returns on the daily price of XRP through futures contracts and swap agreements, suitable for aggressive investors who are bullish on XRP.

ProShares UltraShort XRP ETF: Provides 2x inverse returns on XRP daily prices, designed for bearish high-risk players.

ProShares Short XRP ETF: Tracks the daily price of XRP with a 1x inverse return, suitable for hedging or conservative short selling.

These ETFs do not directly hold XRP, but instead gain price exposure through cash-settled Chicago Mercantile Exchange (CME) futures contracts, circumventing the cryptocurrency's private key management and exchange risk. According to SEC filings, the fund is managed by ProShare Advisors and has an annualized expense ratio of approximately 0.95%, which is lower than actively managed funds but higher than traditional equity ETFs. XRP prices rose 3.5% to $2.27 following the announcement of the approval on April 27, bringing the market cap to $312 billion (CoinMarketCap data), showing the market's enthusiastic response to the ETF.

Approved Background

This approval is a continuation of the four-year game between XRP and the SEC. In 2020, the SEC accused Ripple of unregistered securities issuance of XRP, leading to a price crash. In July 2023, the Southern District Court of New York ruled that XRP trading in the secondary market does not constitute securities, paving the way for its legality. In March 2025, Ripple reached a settlement with the SEC, and the SEC suspended its appeal. The new SEC chairman, Paul Atkins, promised a clear regulatory framework for cryptocurrencies, and the approval of the XRP futures ETF (submitted in January and approved in April, just 3 months) is a direct reflection of this policy shift.

The approval process for cryptocurrency ETFs: The game between futures and spot.

Futures ETF: A Low-Threshold Starting Point

The approval of cryptocurrency ETFs typically follows the path of "futures first, spot later." Futures ETFs are based on futures contracts from regulated exchanges like CME, with prices driven by the market, manageable risks, and easier acceptance by regulators. The SEC believes that the futures market is governed by the Commodity Exchange Act, with more mature transparency and anti-manipulation mechanisms. The approval of the XRP futures ETF is a continuation of this logic: CME has planned to launch XRP futures contracts (with specifications of 2500 and 50,000 XRP) on May 19, providing a liquidity foundation for the ETF.

The ETF journey of Bitcoin and Ethereum has validated this pattern. In October 2021, ProShares Bitcoin Futures ETF (BITO) became the first cryptocurrency ETF in the United States, with a trading volume nearing $1 billion on its first day of listing. In October 2023, VanEck Ethereum Futures ETF (EFUT) was approved, with an average daily trading volume of $50 million. The approval of futures ETFs typically paves the way for spot ETFs, as they demonstrate market demand and market stability.

Spot ETF: Greater Benefits

Spot ETFs directly hold crypto assets, with prices closer to the real-time market, and management fees are usually lower (0.2%-0.5%), making them more attractive to retail and institutional investors. The approval difficulty for spot ETFs is higher, as the SEC has long been concerned about manipulation risks in the crypto market, insufficient liquidity, and investor protection issues. The Bitcoin spot ETF was approved in January 2024 (including products from Grayscale and BlackRock), attracting over $50 billion in inflows, with the BTC price rising from $42,000 to $70,000 within three months. The Ethereum spot ETF was approved in July 2024, with inflows of around $10 billion, and the ETH price increased by 20%.

The benefits of spot ETFs far exceed those of futures ETFs for three reasons:

Direct price linkage: Spot ETFs directly hold assets, reducing the impact of futures premiums or discounts, resulting in more transparent pricing.

Institutional appeal: Spot ETFs align better with traditional asset allocation needs, attracting large players such as pension funds and hedge funds.

Market Confidence: Spot ETFs are seen as a symbol of the "legitimization" of crypto assets, boosting community morale and long-term investment.

The application for the XRP spot ETF (submitted by Grayscale, Bitwise, etc.) is still under review. Polymarket predicts that the probability of approval before the end of 2025 is 75%, driven by the success of the futures ETF. If the XRP spot ETF is approved, it is expected to attract $5-10 billion in funds, and the XRP price may exceed $3.

A Historical Lesson: Bitcoin and Ethereum

The ETF journeys of Bitcoin and Ethereum provide a reference for XRP. The approval of the Bitcoin Futures ETF (2021) validates market demand, but its leverage and high fees (around 0.95%) limit the attractiveness of long-term holdings. Spot ETFs (2024) drove massive institutional inflows, with CoinShares reporting that global crypto ETF assets under management (AUM) increased from $50 billion to $120 billion in 2024. Ethereum's futures ETF (2023) has less trading volume than Bitcoin due to the volatility of the ETH market, but the approval of spot ETFs has directly promoted the institutionalization of the DeFi ecosystem.

The XRP futures ETF may bring a short-term speculative frenzy, but the potential approval of a spot ETF would be a greater catalyst. Kaiko analysis points out that the market depth of XRP (with a daily trading volume of about $2 billion) is lower than that of BTC and ETH, which may limit the initial scale of a spot ETF, but its cross-border payment applications could attract unique institutional demand.

The approval of the XRP futures ETF makes it the third cryptocurrency to receive ETF approval in the United States after Bitcoin and Ethereum, and the first clear "altcoin" futures ETF. Bitcoin and Ethereum were prioritized for approval due to their market capitalization and the maturity of their infrastructure, while other major altcoins like Solana, Cardano, and Polkadot have not yet received ETF approval. The 2x Long Daily XRP ETF (XXRP) launched by Teucrium on April 8 has proven market demand, and ProShares' three ETFs further solidify XRP's pioneering position.

In the spot ETF field, XRP has yet to make a breakthrough. The XRP spot ETF applications from Grayscale and 21Shares are still awaiting a decision from the SEC. If approved, XRP will become the first altcoin spot ETF, ahead of Solana (whose ETF application was submitted at the end of 2024) and other competitors. On the X platform, the XRP community (self-proclaimed "XRP Army") is full of anticipation, with posts claiming: "XRP is rewriting the history of altcoins!"

Recent developments of XRP: from legal victories to global expansion

Legal and Market Breakthrough

The approval of the XRP ETF is closely related to its recent developments. The court ruling in July 2023 (that XRP is not a security) cleared regulatory hurdles, and the SEC settlement in March 2025 further boosted market confidence. According to CoinMarketCap data, the price of XRP has risen 15% since the settlement, reaching $2.27 on April 27, with a market capitalization of $312 billion, ranking sixth globally. The 24-hour trading volume surged to $2.7 billion, indicating strong speculative interest.

The global expansion of RippleNet

Ripple continues to advance the use of XRP in cross-border payments. RippleNet has reached more than 70 countries and has partnered with more than 300 financial institutions, including Santander and Standard Chartered. In the first quarter of 2025, RippleNet's annual trading volume surpassed $10 billion, up 25% year-over-year. XRPL's technical advantages (1,500 transactions per second, energy consumption is only 1/10,000th that of Bitcoin) make it a potential alternative to SWIFT. In March, Ripple expanded its presence in Southeast Asia with the acquisition of payments startup Tranglo, with XRP's on-chain transfer volume growing by 30%.

Community and ecological vitality

The XRP Army has been instrumental in driving the narrative. Memes such as "XRP to the Moon" and "SEC 0, XRP 1" were widely circulated on the X platform, with millions of views following the announcement of the approval. Ripple has also funded a developer program for the XRPL ecosystem, adding 50 new decentralized applications (DApps) in the first quarter of 2025, including NFT marketplaces and DeFi protocols. In contrast, XRP's community culture is more about legal triumphs and institutional narratives than the grassroots of meme coins.

Investor Perspective: Opportunities and Challenges

Opportunity: A Stepping Stone to Mainstream

XRP futures ETFs provide a low-barrier entry for institutional and retail investors. Institutions can bet on XRP prices through NYSE Arca without facing compliance challenges from cryptocurrency exchanges. The CME's XRP futures plan (launching on May 19) will further enhance liquidity, with an expected average daily trading volume of up to $500 million. Retail investors can participate through brokerage accounts without the need to manage wallets, while the Ultra ETF's 2x leverage attracts speculators, and the Short ETF provides a hedge for those taking short positions.

Challenge: Leverage and Market Risk

The risks of leveraged ETFs should not be overlooked. The 2x return on Ultra and UltraShort ETFs is based on daily resets, and long-term holdings may deviate from expectations due to compounding effects. SEC filings warn of the risk of manipulation in the XRP market, with 20% of XRPL validators being attacked that could lead to trading exceptions. The price of a futures ETF is also affected by contango or backwardation, which can be disconnected from the XRP spot price. In contrast, a spot ETF (if approved) will provide more direct exposure and reduce derivatives complexity

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Conclusion

ProShares' three XRP futures ETFs will be launched on April 30, providing investors with tools ranging from aggressive speculation to conservative hedging. As the first altcoin futures ETF following Bitcoin and Ethereum, XRP's breakthrough marks an accelerated integration of the crypto market into mainstream finance. The approval of futures ETFs paves the way for spot ETFs, which could bring greater capital inflows and market confidence. XRP's legal victories, RippleNet's global expansion, and community enthusiasm provide solid support for its ETF journey.

However, the high risk of leveraged ETFs and the potential volatility of the XRP market remind us that this journey is fraught with uncertainties. In 2025, the crypto market is standing at a watershed moment: can the institutionalization of XRP pave the way for other altcoins? Will the XRP Army's Dream Rewrite Crypto History? On April 30, the opening bell for NYSE Arca will kick off. Will you join this financial adventure, or will you wait and see?