Despite the excitement surrounding the launch of the first-ever XRP ETF, the price of XRP has failed to meet investor expectations, falling by nearly 3% over the last day. This underwhelming performance has sparked questions about the asset’s future movement, especially after the introduction of Teucrium’s leveraged XRP ETF.
Lackluster Reaction to XRP ETF Launch
On its debut, the Teucrium 2X Daily Long XRP ETF, designed to give investors double the exposure to XRP, did not generate the anticipated rally for the asset. According to CoinMarketCap data, XRP’s price dropped nearly 5% within 24 hours of the ETF launch, hovering around $1.81. This stark contrast to the hype surrounding the ETF has left investors puzzled about the reasons behind the price decline.
Uncertainty Over Leveraged ETF and Lack of Spot ETF Approval
One of the key factors contributing to the sluggish market reaction is the nature of the ETF itself. The leveraged ETF, which offers double exposure, was launched without the approval of a spot ETF from the U.S. Securities and Exchange Commission (SEC). This absence of a spot ETF—widely anticipated by market participants—has dampened enthusiasm. Bloomberg market analyst Eric Balchunas called the launch “very odd,” noting that historically, spot ETFs have led to substantial price rallies, as seen with Bitcoin and Ethereum.
Broader Market Selloff Impacting XRP
The broader cryptocurrency market has also played a role in XRP’s price downturn. Major cryptocurrencies such as Bitcoin and Ethereum have experienced significant declines, with Bitcoin struggling to maintain a price above $80,000 and Ethereum falling nearly 6% in the past 24 hours. This widespread market selloff, compounded by growing geopolitical tensions, such as the US-China trade war, has exerted pressure on altcoins like XRP, ADA, SOL, and BNB.
Speculative Trading and Profit-Taking
Another factor contributing to XRP’s price decline is the typical speculative behavior surrounding major events. Ahead of the ETF launch, rumors and optimism sparked a buying frenzy, but as the news of the ETF launch became reality, some investors may have opted to “buy the rumor, sell the news,” leading to a correction. The lack of significant price movement following Ripple’s $1.25 billion acquisition of Hidden Road further underscores the challenge XRP faces in sustaining its value amid ongoing market fluctuations.
With continued uncertainty around the approval of a spot XRP ETF and broader market trends, the future of XRP remains uncertain, leaving investors to watch closely for any developments that could spark a reversal in its price trajectory.
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