The first U.S. exchange-traded fund (ETF) offering direct spot exposure to XRP is set to hit the market this week. REX-Osprey announced on social media platform X on Sept 15 that the REX-Osprey XRP ETF (ticker: XRPR) will launch, becoming the first U.S. ETF to deliver spot exposure to the third-largest cryptocurrency by market capitalization.
Regulatory Innovation: The '40 Act Structure
The fund's filing takes a unique regulatory route. REX-Osprey submitted a registration statement on Jan 21, 2025, for a suite of ETFs including an XRP-linked fund, filed under the Investment Company Act of 1940 — a strategy distinct from other issuers who seek approval under the Securities Exchange Act of 1933. Nate Geraci, president of Novadius Wealth Management, called it a “clever regulatory end-around,” adding that the move will serve as a “litmus test for '33 Act spot XRP ETF demand.”
According to SEC filings, the fund “seeks investment results, before fees and expenses, that correspond to the performance of XRP.” It may also invest in derivatives such as futures contracts and swaps to gain XRP price exposure.
Hybrid Structure Sparks Debate
While marketed as a spot XRP ETF, Bloomberg ETF analyst James Seyffart explained: “This isn’t ‘pure’ spot. It will hold XRP directly and also other spot XRP ETFs from around the world to get its exposure. The fund documents also allow derivatives usage for exposure if needed, but that is not the primary exposure method.” He noted that the hybrid structure provides regulated access to XRP, even if it falls short of a fully spot-based product.
Futures-based XRP ETFs already manage nearly $1 billion in assets, underscoring strong demand. Geraci believes the XRPR launch will be a pivotal indicator of appetite for spot XRP ETFs under the '33 Act framework.
Industry Implications
The debut of XRPR marks another milestone in the evolution of U.S. digital asset ETFs. Despite questions about its hybrid nature, most analysts view it as a positive step toward wider institutional adoption. The product could pave the way for more pure-play spot XRP ETF applications and further legitimize XRP as a mainstream asset class.