Pundit Says Newly Launched Amplify XRP-Based ETF (XRPM) Not Bullish at All for XRP, Here’s Why

XRPM ETF Sparks Controversy Amidst Community Debate

A new XRPM ETF, designed to profit from XRP's volatility rather than accumulate the token, has ignited a heated discussion within the XRP community. While some view the product as a sign of market maturity, critics argue it offers no direct benefit to XRP's price and may even dampen its momentum.

The core of the controversy lies in the ETF's structure: it does not hold XRP directly. Instead, it generates yield by selling call options on XRP's volatility. This approach means the ETF does not contribute to XRP's supply absorption or drive demand through token accumulation.

Criticism: "Zero Buying Pressure, Zero Price Impact"

Crypto commentator Pumpius has been a vocal critic, asserting that the XRPM ETF provides "zero buying pressure" for XRP. According to Pumpius, the fund's strategy is inherently non-bullish for XRP because:

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  The ETF profits when XRP trades sideways.
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  It "harvests volatility," which can potentially limit upside price swings.
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  Investors are incentivized by yield, not by XRP's appreciation potential.

Pumpius stated that the ETF monetizes XRP volatility without creating any buying pressure on XRP itself. He further argued that until spot-backed ETFs or genuine on-chain liquidity demands emerge, the XRPM ETF remains "irrelevant, or even negative, for price acceleration."

Counterarguments: Spot ETFs as the True Catalysts

Crypto analyst VanQish has pushed back against Pumpius's assessment, arguing that focusing solely on XRPM misses the larger picture. VanQish acknowledges that XRPM does not buy XRP but emphasizes that it is just one of many ETFs, and its purpose was never to directly drive XRP's price.

"XRPM isn’t designed to pump XRP. It’s an income weapon that monetizes volatility," VanQish stated. He highlighted that the true catalysts for XRP price movement are the upcoming spot-backed XRP ETFs, which are mandated to acquire physical XRP to support their products.

Spot ETFs: Poised to Impact Supply and Demand

VanQish pointed to a variety of impending ETF types, including accumulation, institutional custody, and settlement-focused ETFs, many of which will necessitate substantial XRP purchases. These products are expected to drain circulating supply, potentially contributing to the supply shock that many analysts have predicted for XRP.

"XRPM = doesn’t need to buy XRP. Spot ETFs = MUST drain the supply," VanQish emphasized. He characterized XRPM as a "distraction," asserting that the real drivers of XRP's price trajectory will be the spot ETFs and the developing institutional settlement rails.

A Divided Yet Energized Community

The ongoing debate over the XRPM ETF reflects a division within the XRP community. Some members believe that volatility-based financial products detract from price momentum, while others see them as enhancing market sophistication as XRP integrates further into institutional finance.

As multiple XRP ETFs are slated to launch soon, the discussion surrounding XRPM may soon be overshadowed by the impact of the spot ETFs, which have the potential to significantly influence XRP's liquidity, supply, and long-term valuation.