The number of US XRP funds continues to grow. Asset manager Kurv Investment Management has filed with the SEC for a new ETF: the Kurv XRP Enhanced Income ETF, with ticker KXRP. The fund will trade on the Cboe BZX Exchange.
Not a spot ETF but a derivative fund
The Kurv ETF is different from the existing XRP spot ETFs. The fund will not own XRP directly, but will track its price through derivatives such as futures, options and other contracts. According to the filings, under normal circumstances, 80% of the assets should be in these XRP-related instruments.
In addition, the fund can use bonds and other debt instruments to generate additional income. The addition “Enhanced Income” in the name indicates that the fund not only aims for price gains, but also wants to pay regular returns to investors. Kurv is working on a similar product for Ethereum (ETH).
Existing XRP ETFs attract $1.2 billion
The application comes at a time when institutional interest in XRP is growing strongly. The first XRP spot fund was launched in November by asset manager Canary, followed by four other funds. Together they have now raised approximately $1.21 billion in capital, according to data from SoSoValue.
Yet March seems to be an exception for the time being. The month stands at a net outflow of about $26 million, after four consecutive days of investors pulling money from the funds. This outflow is related to the geopolitical tensions surrounding Iran, which causes uncertainty on the financial markets.
What’s the difference for investors?
For investors considering investing in XRP, it is important to understand the difference. Spot ETFs actually own the coin and track its price directly. Derivatives funds such as the Kurv ETF track the price indirectly through contracts. This offers opportunities for additional returns, but also entails additional risks, such as deviations from the actual XRP price.
Private investors who want to own XRP directly usually purchase the coin via a crypto platform and store it in their own wallet.
Source: https://newsbit.nl/nieuwe-xrp-etf-aangevraagd-in-de-vs-fonds-kiest-opvallende-aanpak/
