Summary Volatility Shares' XRPI ETF offers indirect XRP exposure via futures, not spot, resulting in higher costs and tracking error. XRPI’s 0.96% expense ratio (until June 2026) and monthly dividends (~2.2% yield) are offset by roll costs and contango risk. Spot XRP ETFs like XRPZ or XRP (Bitwise) provide more efficient, lower-cost exposure compared to XRPI’s derivative structure. I find XRP fundamentally unattractive due to centralization, governance risks, lack of validator incentives, and concentrated token ownership. XRPI ETF Overview We review the structure of Volatility Shares’ XRPI ETF, explain why, if I were to buy XRP, I would not choose this ETF but would prefer other spot ETFs instead, and finally why I consider XRP a token I would not invest in. Volatility Shares Web Volatility Shares’ XRPI ETF ( XRPI ) indirectly provides exposure to the XRP cryptocurrency via regulated XRP futures contracts (x1 exposure) listed on CFTC-registered U.S. futures exchanges (such as CME). This means that it is not a spot ETF and therefore the fund does not buy or hold XRP, and the exposure is always indirect, implemented through financial derivatives. Volatility Shares’ XRPI Prospectus (SEC) In their prospectus , they describe that at least 80% of its net assets will be invested in what they call “XRP-Linked Instruments” – mainly XRP Futures Contracts + swaps and other derivatives referencing XRP spot, XRP ETPs, etc. Volatility Shares Web On the fund's website, you can find the main details, among which we highlight the expense ratio assumed by the investor. Until 30 June 2026, the fund offers an exemption on the 1.15%, leaving the cost at 0.96%. The cost is directly discounted from the NAV of the fund, so as investors the effect is “suffered” in a lower return. Operations And Contango Risks Operationally, the fund regularly rolls its futures contracts as they approach maturity. If the price of the new contracts is higher than those they have in possession (contango) at the time of the rolling, the fund sells “low” and buys high, this generates a cost that erodes the performance over time. Conversely, if the futures curve is downward-sloping (backwardation), at each roll the fund sells high and buys low, generating positive roll yield. Volatility Shares’ XRPI Prospectus (SEC) In their prospectus, they emphasize that persistent contango situations will negatively affect the fund’s performance and have a significant impact on the NAV. That said, the fund makes money through three main avenues: By appreciating the price of the underlying: if XRP goes up, so does the futures price. Rolling: whenever the curve is rolled in backwardation, the fund generates an additional positive return that adds to overall performance. Interest on T-bills. Holdings Holdings (Volatility Shares Web) At the time of writing, the holdings clearly show the characteristics and operation of the fund described above. Currently, the entire position is concentrated in a CME contract with maturity (Dec-25). The rest of the portfolio is composed of collateral and cash that provide liquidity and carry. Distributions Distributions (Volatility Shares Web) In the same way that Volatility Shares has with other ETFs, XRPI distributes dividends on a monthly basis. Since its launch in May 2025, the minimum distribution has been $0.0125 per share and the maximum $0.0335. This variability is not surprising since they have a variable distribution policy that depends mainly on price revaluation (realized mark to market gains) and less on the income generated with the interest of the collateral and the carry of the roll. Also, distribution is not guaranteed and could be null. Nasdaq Currently, the dividend yield stands at around 2.2% . In both tables, we can see how distributions increased over the summer, while the month-over-month change in the distribution turned negative in October and November: Jun - Jul: +12.8%. Jul - Ago: +132.6%. Ago - Sep: +2.1%. Sep - Oct: -6.0%. Oct - Nov: -23.8%. This pattern confirms that most of the cash paid out depends on realized mark-to-market gains, which naturally shrink when XRP underperforms or corrects. Peers Recently, new XRP ETFs have been launched. To see if XRPI would still be the best alternative, let’s compare liquidity and AUM, expense ratios and dividends. XRP ETFs peers table (Node Analytica) Type: From an operational point of view, any of the ETFs are a better choice than XRPI since spot trading is less expensive and complex than using derivatives to replicate asset movement. Expense Ratio: All ETFs, just launched in November, except XRPC, offer temporary discounts on the expense ratio. If we ignore this part, the most attractive would be XRPZ and clearly XRPI loses to everyone. AUM: It’s still early, but XRP (Bitwise) and XRPC stand out for their ability to attract assets compared to the other ETFs. If they followed the trend, they would have an advantage over the others from a cost standpoint. Seeking Alpha Dividends: XRPI is the only one that pays dividends. If you're looking for XRP exposure and a recurring revenue stream, XRPI is your ETF right now. However, the effect of the dividends is diluted by a higher expense ratio and on the other hand, using futures instead of spot typically increases the fund’s tracking error versus XRP spot and, more importantly, introduces structural roll costs that tend to make long-term returns lag a spot ETF. Finally, the recent news of Vanguard's change in its policy regarding crypto assets clearly favors ETFs that have opened the door such as: XRPC, XRP, XRPZ, GXRP, among others. XRP Thesis From a mainly fundamental point of view, I do not find the XRP token attractive as an investment. XRP use case: For starters, XRP’s goal has always been to cover the inefficiencies of the current SWIFT system – that is, to replace it. This implies that its main utility today is cross-border payments, however in the face of regulations, token volatility, etc. Ripple already has its own stablecoin, RLUSD, which leads me to think that XRP will remain merely as a governance token and to maintain the operation of the network. The blockchain network is highly centralized in a few nodes, and so is its governance. This means that, the control of the “laws” that govern the network is under the domain of a few and therefore, the ability to modify any rule of the network is very simple to apply, for example to increase the total number of tokens in circulation, to change the current release protocol of the tokens: this has already been done and, without going into much detail, in 2017 they implemented a program (escrow) that scheduled the release of 1 billion XRP monthly and recently (2025) changed the way in which those unlocks were executed. On the other hand, there are no incentives for validators, that is, there are no rewards except for participating in the decisions of the “laws” of the chain, that is, in governance. There is no incentive to set up a node, and this gives me the feeling of seeing it more like a private circle. So I wonder: what could be the driver for an XRP revaluation? If their only use is to serve the functioning of the chain and governance? If it is also intended to be a system for cross-border payments between banks, they will not want to use a volatile token but their own stablecoin, RLUSD. That said, these payments would still run through its network, requiring XRP to process the transactions. However, the supply–demand dynamics would likely be very stable and, since no one directly benefits from the XRP used for transactions because the tokens are burned, I do not see in this relationship any strong driver of price appreciation. Instead, I have the feeling that XRP will end up being a very stable token, potentially trading permanently below one dollar. On the other hand, the distribution of tokens is still very concentrated in a single “player”: about 42% is held by Ripple Labs , giving them significant power to move the price in their interests. Of course, to speculate is entirely valid and there can always be volatility, but personally, I don't see any initiative, and it's not a token that I would invest in. But if I did, I would choose one of the spot ETFs: XRPZ or XRP (Bitwise).
