Popular crypto analyst Scott Melker has criticized Volatility Shares’ latest proposal to launch 3x and 5x leveraged XRP ETFs
For context, Volatility Shares applied to the SEC yesterday to launch 27 new leveraged single-asset exchange-traded funds (ETFs).
Volatility New ETF Filing
The proposed products span both major U.S. stocks and crypto assets, featuring 3x and 5x leverage exposure to names like XRP, Ethereum, Bitcoin, and Solana alongside popular equities such as Tesla, Amazon, MicroStrategy, and Circle.
His frustration stems from the high-risk nature of leveraged products combined with the volatility associated with altcoins. Leverage products are known to amplify gains and losses, mainly for sophisticated investors capable of managing risk.
In Melker’s view, applying such leveraged trading to altcoins—assets already known for extreme volatility and traded mainly by retail investors—could expose individual traders to substantial losses.
Based on Volatility Shares’ proposal, a 10% drop in XRP price could mean a 30-50% loss for the 3x or 5x leveraged XRP ETF. If prices continue to fall, investors’ positions could be wiped out completely.
The dangers of leverage were on display recently when $19.31 billion worth of leveraged positions were liquidated over the weekend—the largest liquidation event in history. Notably, XRP positions accounted for around $707 million of that total.
Bloomberg ETF Analyst React
Besides Melker, other financial experts also reacted to Volatility Shares’ recent ETF filings. Eric Balchunas of Bloomberg noted that while the SEC has yet to approve a 3x leverage ETF, Volatility is pushing for 5x versions, which many consider to be even riskier.
Despite the risky nature of the proposed ETFs, Balchunas emphasized that the products will launch 75 days after the filing if the ongoing government shutdown continues and the SEC does not disapprove the application.
Meanwhile, Volatility Shares already has an existing XRP ETF. Launched in May, the product gives investors 1:1 exposure to the price movements of XRP. The fund currently boasts an AUM of $189.1 million, with a daily volume of $9.7 million.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Ripple’s XRP Crashes 7% Weekly While New Crypto Project GCOIN by PlayNance Gains Momentum
The cryptocurrency market has lost more than $200 billion in total capitalization over the past few days. This comes on the back of a 7% drop in Bitcoin’s price, which also dragged down most altcoins. Ripple’s XRP is no exception.
XRP Price Shaky Amid Global
CryptoPotato59m ago
The Higher the XRP Price, The Cheaper It Is for Payments: Ripple CTO Emeritus - U.Today
David Schwartz, Ripple's former CTO, asserts that a higher XRP price enhances payment efficiency by reducing the token quantity needed for transactions. He argues this facilitates liquidity in Ripple's On-Demand model, though XRP struggles to regain the $2 level amid reduced network activity and market uncertainty.
UToday1h ago
Solana and XRP Slide Continues — New $100 BTC Reward Model Keeps Rising
SOL entered 2026 above $140 and has spent the first quarter giving most of that back. The asset is currently consolidating between $85 and $90 inside a rising wedge pattern that technical analysts flag as pointing toward further downside — a formation that typically signals weakening recovery
CryptoPotato1h ago
Pro-XRP Attorney and Ripple CEO Agree the U.S. Can’t Afford Another Gary Gensler Moment
The pro-XRP attorney John Deaton has concurred with recent remarks by Ripple CEO Brad Garlinghouse that the United States cannot afford another Gary Gensler experience. He was the former chair of the U.S. Securities and Exchange Commission (SEC).
In a tweet explaining his opinion, Deaton insisted t
CryptoPotato1h ago
We Asked 2 AIs: What Must XRP Do to Escape the Ongoing Crisis?
Alongside the rest of the crypto market, Ripple’s cross-border token tried to break out in the middle of the business week, surging to a monthly peak of over $1.60. However, the subsequent rejection pushed it south to under $1.50 as of press time.
Even the most recent developments on the Ripple
CryptoPotato2h ago
