XRP's Price Stagnation and Amplify's Covered-Call ETF: A High-Yield Strategy in a Crypto-Adjacent Downturn

The cryptocurrency market in late 2025 has been marked by a pronounced shift in dynamics, with XRP-a key player in cross-border payments-trading in a narrow range near $2.16 despite broader market volatility. This stagnation, coupled with the launch of Amplify's XRP 3% Monthly Premium Income ETF (XRPM), has sparked renewed debate about income-generation strategies in a crypto-adjacent environment. This analysis evaluates the interplay between XRP's price behavior and Amplify's covered-call approach, assessing whether the latter offers a compelling high-yield alternative for investors navigating a challenging market.

XRP's Stagnation: A Supply-Demand Imbalance

XRP's recent performance reflects a structural imbalance between supply and demand. According to market intelligence firm Glassnode, the percentage of XRP supply in profit has plummeted to 58.5%, with 37.36 billion tokens held in profit and 41.5% (28.5 billion XRP) in loss as of November 2025. This decline follows a 13.88% monthly price drop in November-the largest since February 2025-driven by new investors who entered the market after the November 2024 price breakout. The retreat from previous highs of $2.7 to $3.6 has left many long-term holders in a precarious position.

Historically, such low levels of supply in profit have coincided with bearish price action. Glassnode notes that the last time XRP recorded a similar metric, the price was around $0.53, suggesting a potential correlation between supply dynamics and valuation. This raises questions about whether XRP's current stagnation is a temporary correction or a precursor to a deeper downturn.

Amplify's Covered-Call Strategy: Balancing Income and Exposure

Amplify's XRPM ETF, launched in late 2025, aims to address these uncertainties by offering a dual mandate: capturing XRP's price appreciation while generating consistent income. The fund employs a covered-call strategy, writing weekly out-of-the-money call options on 30–60% of its XRP exposure to target a 36% annualized option premium (3% monthly income). The remaining 40–70% of the portfolio remains unhedged, preserving upside potential.

This structure differentiates XRPM from direct XRP investment. By avoiding direct token ownership and instead using XRP futures, spot ETFs, and options, the fund mitigates regulatory and liquidity risks while maintaining price alignment. The weekly options strategy also provides four times as many premium-collection opportunities compared to monthly options, enhancing flexibility in volatile markets.

Performance in a Stagnant Market: A Comparative Lens

In a stagnant or declining XRP environment, XRPM's strategy theoretically offers two advantages:
1. Income Generation: Even if XRP's price remains flat, the fund's covered-call approach generates recurring premiums. For example, a 36% annualized yield (3% monthly) would provide a buffer against losses in a prolonged downturn.
2. Risk Mitigation: By hedging a portion of its exposure, the ETF reduces downside risk compared to pure price speculation. This is critical given that 41.5% of XRP's supply is currently in loss.

However, the strategy's effectiveness depends on market conditions. In low-volatility environments, the premiums collected may shrink, reducing the fund's ability to offset losses. Additionally, the 0.75% expense ratio could erode returns if XRP's price stagnates for extended periods.

Market Sentiment and Strategic Relevance

The launch of XRPM aligns with growing demand for crypto-adjacent income products. For instance, the XRPC ETF by Canary Capital saw $58 million in day-one trading volume, signaling strong investor appetite for structured crypto strategies. Amplify's approach, however, introduces a layer of sophistication by combining income generation with partial price exposure.

Critically, the fund's performance must be evaluated against XRP's historical behavior. During 2023–2025, periods of stagnation saw XRP's supply in profit decline sharply, yet the ETF's covered-call strategy could have provided a counterbalance through premium income. This suggests that XRPM may appeal to investors seeking yield in a market where traditional price speculation is less reliable.

Conclusion: A High-Yield Alternative with Caveats

Amplify's XRPM ETF represents a novel approach to navigating XRP's current stagnation. By leveraging weekly options and a diversified exposure model, the fund aims to deliver consistent income while retaining upside potential. However, its success hinges on market volatility and the ability to adjust strike prices dynamically. For investors, the key takeaway is that XRPM offers a structured alternative to direct XRP ownership, particularly in environments where price stability is the norm rather than the exception.

As the crypto market continues to evolve, strategies like Amplify's may become increasingly relevant-bridging the gap between traditional finance and digital assets in a high-yield, low-volatility paradigm.