XRP News Today: SEC Balances Innovation and Risk in 3x XRP ETF Approval Dilemma

GraniteShares, a global exchange-traded product (ETP) issuer, has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) for two 3x leveraged exchange-traded funds (ETFs) tied to XRP, the digital asset developed by Ripple. The GraniteShares 3x Long XRP Daily ETF and GraniteShares 3x Short XRP Daily ETF aim to provide investors with exposure to three times the daily performance of XRP, amplifying both gains and lossesTheCryptoBasic^[1]. The filing, dated October 7, 2025, indicates that the products could launch as early as December 21, 2025, assuming regulatory approval within 75 daysCoinCentral^[2]. The ETFs will reset leverage daily, meaning they are designed to track 300% of XRP's one-day return for long positions or the inverse for short positions, but they are not intended for long-term holding due to compounding risksCoinReporter.io^[3].

The proposed products align with a broader trend of increasing demand for leveraged crypto ETFs. For example, Teucrium's 2x Long Daily XRP ETF (XXRP) has already attracted $421.1 million in assets under management since its April 2025 launchTheCryptoBasic^[1]. GraniteShares is also seeking approval for similar 3x leveraged ETFs for Bitcoin, Ethereum, and Solana, signaling growing appetite for speculative crypto products in regulated marketsCoinReporter.io^[3]. However, the 3x structure introduces heightened risks. A 33.3% drop in XRP's price in a single day could erase an investor's entire position in the long ETF, while a 33.3% rise would wipe out the short ETF's valueTheCryptoBasic^[1]. Analysts emphasize that these instruments are unsuitable for most retail investors due to their volatility and decay risks.

The SEC's evolving regulatory framework is a critical factor in the timeline for approval. The agency recently adopted the Generic Listing Standards, which grants regulators flexibility to approve or reject crypto ETF applications without binding deadlinesCoinCentral^[2]. This shift has already delayed decisions on spot XRP ETFs, including Bitwise's proposal, due to the ongoing U.S. government shutdown, which has slowed SEC operationsTheCryptoBasic^[1]. The shutdown also delayed the final decision on Canary Capital's Litecoin ETF this monthCoinCentral^[2]. While GraniteShares' filing is still a "work in progress," lacking details like ticker symbols and expense ratios, the company has indicated a potential December 2025 launch dateTheCryptoBasic^[1].

Pro-XRP lawyer Bill Morgan has highlighted the potential impact of the 3x ETFs, stating that they could trigger "panic buying" among retail investorsCoingape^[4]. XRP's price currently trades near $2.85, a key support level, with technical analysts warning that a drop below $2.68 could push the token toward $2.20Coingape^[4]. Blockchain analytics firm Santiment noted that retail fear levels have reached a six-month high, potentially preceding a price reboundCoingape^[4]. Despite these dynamics, institutional and retail demand for leveraged exposure remains strong, with existing 2x XRP ETFs like XXRP and REX-Osprey's XRPR accumulating $440 million and $87 million in assets, respectivelyCoingape^[4].

The filing reflects GraniteShares' strategy to capitalize on the maturation of crypto markets. The company's CEO, Jeff Klearman, has previously emphasized the firm's focus on "innovative, low-cost structures" for volatile assetsCoinReporter.io^[3]. However, critics caution that 3x leveraged ETFs are inherently complex and unsuitable for long-term portfolios. As outlined in Investopedia, daily compounding and rebalancing can erode value even in flat markets, while high expense ratios and derivative structures further amplify risks. These products are explicitly designed for active traders seeking short-term opportunities, not for passive investors.

GraniteShares' move underscores the growing integration of crypto into traditional financial markets. The SEC's regulatory clarity and the success of spot Bitcoin and Ethereum ETFs have paved the way for more sophisticated products. However, the approval of 3x leveraged ETFs will depend on the SEC's ability to balance innovation with investor protection, particularly as leveraged products intensify market volatility and speculative activityCoinReporter.io^[3].