Roundhill Investments has filed an amended registration statement for its XRP ETF, which it could launch as soon as January 29. Notably, the XRP fund differs from the spot XRP funds and will only seek to provide investors with income from the altcoin rather than provide spot exposure.
Roundhill Files Form N-1A For XRP ETF
Roundhill filed a post-effective amendment for its XRP Covered Call Strategy ETF, noting that the filing was intended to delay the fund’s effectiveness until January 29. In line with this, the fund could launch this month, unless another amendment delays its effectiveness. The potential launch of Roundhill’s XRP ETF could provide a major boost for the altcoin, as the fund offers another avenue for institutional investors to gain exposure to the token.
Roundhill’s XRP fund differs from the spot XRP ETFs, as it doesn’t provide spot exposure to the altcoin. Instead, it seeks to provide current income and exposure to the price return of one or more ETFs that provide exposure to XRP and whose shares trade on a U.S.-regulated exchange. Basically, the fund tracks the performance of other XRP ETFs that provide direct exposure to the altcoin and doesn’t invest directly in the altcoin.
Roundhill’s XRP ETF prospectus also revealed that the Fund seeks to achieve its investment objectives through the use of a synthetic covered call strategy that provides current income. In tracking the price return of other XRP ETFs, the Fund isn’t just limited to spot XRP funds. It can also track the price return of ETFs that derive exposure to XRP through investments in exchange-traded futures contracts that utilize XRP as the reference asset.
What The Filing Confirms For The Altcoin
In an X post, crypto pundit Richard stated that Roundhill’s XRP ETF filing confirms that XRP is an approved underlying asset for regulated derivatives. He further remarked that this means that XRP-linked options are permissible inside an ETF wrapper and that risk committees, counterparties, and clearing structures are already signed off on.
Richard also noted that covered-call ETFs don’t appear first and only come into play after an asset is legally and structurally accepted. Meanwhile, the pundit alluded to the fact that the sole purpose of the latest filing was to delay the effectiveness. He explained that this means that the product structure is complete, that approval is not the issue, and that timing is the variable.
The pundit further stated that Roundhill isn’t trying to capture upside but is simply monetizing XRP’s volatility. As such, they have a different objective from the spot XRP ETFs, although the same asset and pipeline are involved for this Fund. Richard added that this is derivatives validation, not price discovery, a development he claimed occurs only when an asset is institutionally cleared.
At the time of writing, the XRP price is trading at around $1.84, down almost 2% in the last 24 hours, according to data from CoinMarketCap.
Featured image from Peakpx, chart from Tradingview.com
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