Why Are These Ripple (XRP) ETF Filings the Worst Idea Ever? Analyst Explains
Ripple’s chances of having exchange-traded funds tracking the performance of its own token in the US continue to be extremely high, even though the US SEC keeps delaying almost all applications.
However, there is a new set of filings that went on the SEC’s desk this week, which stirred some controversy in the crypto community.
The idea of these new applications is to allow investors (even retail) to trade ETFs with leverage. The filings, submitted by Volatility Shares, see up to 5x leverage to be used on some extreme cases if the products are greenlighted by the US watchdog.
Scott Melker, better known as The Wolf Of All Streets in the cryptocurrency community, raised a few questions regarding these applications as they might be “the worst idea ever.”
He didn’t blame the underlying assets for it, such as XRP (which he used to make his case), but the overall concept of these funds. After all, the ultimate goal is to allow investors to speculate with leverage on riskier financial assets like altcoins.
If you have been following the latest developments in the crypto market, you might see his point. Recall what transpired less than a week ago, when a cascade of liquidations wrecked more than 1.6 million traders. It became the single largest liquidation event in crypto history, with more than $19 billion evaporated in less than a day.
Consequently, it’s rather controversial to file for such leveraged-focused products just days after such a collapse that was triggered primarily because of excessive leverage used by traders.
The post Why Are These Ripple (XRP) ETF Filings the Worst Idea Ever? Analyst Explains appeared first on CryptoPotato.
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