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XRP ETF structure can cause cost stacking versus XRP spot
On Aug. 24, REX-Osprey’s XRP ETF routed $22.87 million of a $56.68 million portfolio through the CoinShares Physical XRP ETP, and its fund fee could add estimated annual fee drag.
REX-Osprey’s XRP ETF, traded as XRPR, held 40.25% of its assets in the CoinShares Physical XRP ETP on Aug. 24, a setup that can make costs and market frictions stack across two listed products, according to CryptoSlate. CryptoSlate noted that XRPR’s holdings snapshot at the time showed 59.74% labeled as XRP, along with 4.7 million XRPR shares outstanding, a $12.09 net asset value and a $12.06 closing price. The outlet said the presence of an XRP sleeve in the structure is not, by itself, evidence that the CoinShares position lacks XRP backing, because CoinShares states its product is 100% physically backed. The ETF’s prospectus guidance aims to keep at least 80% of assets in XRP and instruments providing XRP exposure, while investing at least 40% in securities such as ETFs and non-U.S. exchange-traded products. At 40.25%, the CoinShares sleeve sat just above the stated floor, while XRPR disclosed a 0.75% total annual operating expense ratio and the underlying CoinShares XRP ETP lists a 1.50% annual fee. CryptoSlate estimated that applying the CoinShares ETP fee to the 40.25% weight could create an annual drag of about 0.60375 percentage points inside XRPR, before changes in allocation, prices, or expenses. The outlet also pointed to potential tracking differences from how exposure is implemented, including that part of XRPR’s exposure is routed through a Jersey-domiciled debt security listed on European exchanges, which can add issuer, custody, and trading-venue steps between XRPR and the underlying XRP.
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