ProShares XRP ETF and Solana ETF Go Live on NYSE Arca, Price Jumps

• The new ProShares ETFs arrive amid growing anticipation around spot SOL and XRP ETFs from firms like VanEck and Bitwise.
• While the SEC has yet to approve any spot versions, the success of futures-based products like SLON and UXRP may influence future regulatory decisions.

ProShares has launched two new leveraged ETFs, which are intended to reflect the daily performance of large altcoins Solana and XRP. The two new ProShares Ultra Solana ETF (SLON) and ProShares Ultra XRP ETF (UXRP) would be two-fold daily returns of respective digital assets by the company, as per company filing. Instead of being the direct holders of the cryptocurrencies, the money gets exposure via regulated futures. Following the development, both XRP and SOL prices have inched higher as bulls take charge. 

ProShares Solana & XRP ETFs In Spotlight

Approval to list the two funds was given by the New York Stock Exchange Arca and as evidenced in a series of letters filed together with the U.S. Securities and Exchange Commission (SEC) on Monday. The approval of NYSE Arca empowers the ETFs to start trading at the U.S. markets. However, due to the cooperation of the SEC, it ensures that the crypto market is opened to more opportunities by investors.

These ETFs are structured to deliver 2x the daily performance of Solana (SOL) and XRP, but they operate exclusively through futures-based strategies. This arrangement helps them to maintain compliance in current regulations in the U.S, which still prohibit direct investment in cryptocurrencies in government coffers. The geared position is targeted at active traders and those entering the marketplace with large institutions that want the higher-risk, high-reward gambles based on the prices of the crypto.

The exposure of the ETFs with regard to the regulatory predispositions is attained by utilizing futures as opposed to exposing them to spot markets. Futures contracts, already approved and traded on regulated platforms, offer more oversight and clearer pricing mechanisms: elements the SEC typically considers when evaluating crypto-linked investment products.

The Regulatory Impact of These ETFs

The action of ProShares comes at a time when the industry stakeholders are waiting on pending applications on spot Solana and XRP ETFs. VanEck and Bitwise are among the asset managers that have submitted proposals of spot-based products, which would directly invest in these digital assets. All such offerings have so far been disapproved by the SEC. XRP price has been showing strength, surging past $3.0 earlier this week, as reported by CNF. A weekly close above this could lead to a sustained rally ahead. 

Further, ETF futures such as SLON and UXRP may influence the regulator to address the regulatory framework of spot crypto ETFs. The reason is that futures ETFs could provide a template of how a derivative-based product may operate under the current conditions of the market. The presence of regulated futures also gives significant data on liquidity and market conduct, which can possibly influence spot approval decisions in the future.

The issuance highlights a macro theme in the ETF sector, in which financial institutions have further opened up their digital asset-related products even with the uncertain regulatory climate. Meanwhile, as Bitcoin and Ethereum ETFs are garnering major inflows, other altcoin ETFs could also gain further momentum despite the regulatory pressure.