XRP ETF Structure May Cause Returns to Diverge From XRP Price

REX‑Osprey’s XRP ETF (ticker XRPR) holds a significant portion of its assets in the CoinShares Physical XRP ETP, creating a two‑layer exposure that can add fees and trading costs.

Asset Allocation and Holdings

As of August 24, the ETF allocated 40.25% of its $56.68 million portfolio to the CoinShares Physical XRP ETP, routing $22.87 million through that product. The overall holdings snapshot showed 59.74% of assets in XRP, with 4.7 million XRPR shares outstanding, a net asset value of $12.09 and a closing price of $12.06.

Fee Structure

The ETF reports a total annual operating expense ratio of 0.75%. The underlying CoinShares ETP charges a 1.50% annual fee. Applied to the 40.25% weight, the CoinShares fee adds an estimated 0.60 percentage‑point annual drag to the ETF’s performance, separate from the ETF’s own expenses.

Potential Tracking Differences

Because part of the exposure comes from a Jersey‑domiciled debt security listed on European exchanges, investors face additional market frictions such as bid‑ask spreads, market depth, and differing trading hours. These factors can affect the ETF’s ability to rebalance, create, or redeem shares efficiently.

Legal and Custody Considerations

CoinShares states its product is 100% physically backed, but the multi‑layer structure introduces an extra issuer, custody, and trading‑venue chain between the ETF and the underlying XRP. This does not change the backing claim but adds complexity to execution.

Impact on Shareholder Returns

The combined effect of the ETF’s own expenses, the weighted CoinShares fee, and trading costs can cause the ETF’s net asset value to drift from the spot price of XRP, resulting in return divergence for shareholders.