Summary XXRP is a 2x long daily leveraged ETF on XRP (not spot) with a TER of 1.89%. Leverage amplifies decay and this becomes evident as the investment time horizon widens. The underlying, XRP, is gaining interest relative to BTC/USD. The catalyst is an apparent programmed scarcity program. An element that is typically highly appreciated by the market, which is why I look with interest at XRP’s lows. XXRP, however, remains in my humble opinion a valid instrument only for very short horizons, preferably intraday. XRP is gaining momentum, and instruments like Teucrium 2x Long Daily XRP ETF ( XXRP ) amplify returns. This is not a free mechanism: it is costly in terms of expense ratio, but also in terms of risk. Leverage amplifies price decay, like any other leveraged instrument. And while on the one hand I remain bullish on XRP, on the other I would not take positions over long horizons through XXRP. So how should this dynamic be interpreted? Well, maybe there is a strategy. But first … What to know? XXRP is a 2x long daily leveraged ETF on XRP with the objective of generating 200% of XRP’s daily performance (not on a weekly or monthly basis). XXRP - fund profile (Seeking Alpha) It does so with a Total Expense Ratio of 1.89% , decidedly high, even for a leveraged crypto instrument. Even more so if we also consider a spread of 0.26%. XXRP - expense grade (Seeking Alpha) How is the leverage structured? XXRP does not hold XRP spot, but rather a book of futures covered by collateral: specifically XRP Futures Jan26 and CME XRP Futures Jan26, with US BANK MMDA – cash equivalent. This results in a total exposure equal respectively to 111% + 89% = ~200%, continuously rebalanced. Decay Over horizons > 1 day, performance can diverge even in the opposite direction compared to XRP. This makes XXRP more similar to a volatility trading instrument than to a pure directional exposure. Why? For the classic reason that characterizes all leveraged ETFs : the compounding effect and daily rebalancing with intraday volatility. In other words, the fund may fail to maintain the 2x, and this is a necessary consideration, especially today that XRP is increasing implied volatility. The monthly roll schedule on XRP implies, in practice, an almost certain drag in my view. Specifically, the roll occurs every month in known windows. And it happens in the presence of contango and potentially low liquidity. This means that the fund sells low and buys higher; which in my view makes the roll yield negative and structural, not episodic. For this reason, XXRP is in my opinion a solution suitable mainly (if not exclusively) for very short time horizons. This does not mean that XXRP is a wrong instrument: if we think about it, it only does what it was designed to do. What to expect from the underlying? XRP starts January with a significant rally, in less than two sessions it records a +20% and today it pulls back while still maintaining a positive trend, and competitive compared to other crypto. XRP - BTC - ETH: Price Return (Seeking Alpha) About +11% intraday, which naturally XXRP was able to optimize. The problem is that the pullbacks of the following days resized the alpha, while still maintaining an outperformance relative to XRP. XRP - XXRP (Seeking Alpha) The reason? David Schwartz, former CTO of Ripple, comments ironically: he attributes the pump to his retirement. Clearly that is not the reason. Personally, I think the market reacted positively to the supply shock: Ripple freezes 500 million XRP until 2028. The crypto market really likes programmed scarcity dynamics . This means less XRP in circulation and therefore more pressure on the price. My opinion? I think this program can bring a positive boost to Ripple. Especially today, when on-chain market liquidity is looking for a better allocation, with Bitcoin having interrupted the upward trend, leaving room for a migration of capital toward altcoins. If we look even more at the correlation between the two, it is possible to realize that this migration process happens more often than one might think (such as May 2025). XRP - BTC (Seeking Alpha) And personally, I find it very convenient in this sense to orient myself on the chart from a technical perspective. If I assume that XRP will maintain a positive momentum, it means that the lows will be “bought by the market”. The XXRP case The problem with XXRP is that it is not suitable to participate over short/medium horizons, but only very short ones, and personally I would prefer daily. For this reason, the reasoning must switch to ultra-short timeframes. In this sense, already from the 1H and simply applying a 14-period RSI, it is possible to understand whether the market really has interest in buying XRP in view of this programmed scarcity. XRP (Seeking Alpha) And in this way it is possible to set up a strategy also on XXRP, and right now specifically we are in a relative low zone; therefore if this is the strategy, in theory demand should arrive to support (at least in this area) valuations. Risk In practice, we are talking about very fast trading on XXRP, and like any ultra-fast operation, there are also “hyper risks.” Carrying the position beyond the daily horizon is not something to be taken lightly in my opinion. This becomes clear when you simply look at the risk section of XXRP (if not XRP itself). XXRP - performance (Seeking Alpha) In less than a year it has lost 57%, while XRP less than -10%. This fully expresses what is the negative effect that derives from leveraged instruments. XRP - performance (Seeking Alpha) Conclusion For this reason, personally I think the right rating is HOLD. The reason lies in the fact that I maintain a positive view on XRP, but I think it cannot be fully captured with XXRP. This is a short/very short-term instrument, and personally I would not go beyond the day. For this reason, I follow with interest on intraday timeframes the price reaction on technical support zones.
