Hold Investment Plans in XRP ETFs, Teucrium Says It Could Drop to Zero!

Bittime - Teucrium launched the first XRP ETF in the United States today on April 9. However, the company warned that investments in the XRP ETF could fall to zero. What is the reason? Here is the review!

Amidst the enthusiasm of investors who want to immediately buy the XRP ETF, Teucrium actually warns that this product is very risky and not for everyone. 

This article will dissect what an XRP ETF is, how it works, and why Teucrium recommends investors think twice before investing. Stay tuned!

Teucrium Releases First XRP ETF in the United States

Source: X

Teucrium, a provider of asset-based investment products, officially launched Teucrium 2x Long Daily XRP ETF. This is an XRP ETF designed to double the daily price movement of XRP.

This means that if the price of XRP rises 5% in a day, then this ETF will try to provide a return of 10%. However, on the other hand, if the price of XRP falls by 5%, the potential loss will also be 10%, maybe even more.

This launch is an important milestone as it marks the presence of the first XRP ETF in the United States. This proves that market interest in crypto assets such as XRP is increasing. 

Read also: BlackRock Potentially Proposes XRP and Solana ETFs

However, despite this optimism, Teucrium openly reminds investors that this product is not suitable for all groups.

Getting to know Leverage in ETFs

This ETF uses a strategy leverage or lever. This is an approach that aims to double profits from daily price movements. 

However, this strategy is a double-edged sword. Profits can be doubled, but the risk of loss also increases drastically.

Products like this are usually aimed at investors who actively carry out daily trading and are ready to monitor market movements in real time. 

For investors who prefer a long-term or passive approach, investing in a leveraged XRP ETF like this is highly discouraged.

Read also: Franklin Templeton Submits XRP ETF to Regulator, Ready to Open Access to New Investments

XRP Still Volatile, Risk Drops to Real Zero

XRP, as the underlying asset of this ETF, is well known high price volatility. Even though the community is growing and adoption is becoming more widespread, the price of XRP is still heavily influenced by market sentiment, regulatory news, and court decisions such as the case with the SEC which is still hotly discussed.

"XRP and related investments are still relatively new, very risky, and have historically shown significant price volatility. The value of investments in this ETF can drop drastically without warning, even to zero," wrote the official statement Teucrium.

With such a clear statement, potential investors should be alert and carry out in-depth research before deciding to buy XRP ETFs.

Be Wise Before Buying XRP ETFs

For those who are interested in doing it investment in the XRP ETF, make sure you fully understand the leverage mechanism, XRP price volatility, and the huge risks that come with it. 

Don't rush to buy an XRP ETF just because you see the potential for double the profit—because the potential for double the loss is also lurking.

Products like Teucrium 2x Long Daily XRP ETF it can be interesting, but only if you are really ready to face the risks. Always do DYOR or do your own research before investing, especially crypto assets.

FAQ

1. What is the Teucrium 2x Long Daily XRP ETF?

This is an XRP-based ETF designed to double the daily performance of the XRP price—for just one trading day.

2. Is the XRP ETF suitable for long-term investment?

This ETF is more suitable for daily trading because the leverage effect does not apply in the long term.

3. What are the main risks of investing in an XRP ETF?

The risk is very high. Investors can lose all their capital in one day because XRP price movements are very volatile.

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Reference 

CoinPedia, Planning to Invest in the US’ First XRP ETF? Here’s Why Teucrium Says It Could Go to Zero, accessed April 9, 2025.

Author: Y