The first-ever XRP exchange-traded fund (ETF) is set to launch in the U.S. on Tuesday under the XXRP ticker, according to Bloomberg.

The leveraged product, which is offered by Teucrium, will deliver twice the daily performance of the Ripple-linked token. 

For instance, if the price of XRP spikes by 10% within a single day, the ETF will increase by roughly 20% (before fees and expenses). The ETF's returns reset on a daily basis, meaning that it will be most suitable for short-term trading for sophisticated market participants who want to take advantage of volatility.  

Notably, the ETF will not offer direct exposure to the token. Instead, it will be based on swaps that will mirror the performance of the token. 

Those who are willing to trade this ETF should be familiar with compounding. If XXRP goes up 10% and then goes down 10% the following day, the holder still ends up in the red. If XRP remains flat after a year of trading, the fund's losses could still be enormous if volatility is too high. Teucrium's prospectus says that ETF losses would be 63.2% if annualized volatility reaches 100%. The returns of the product could end up being eroded even if XRP rallies higher on a longer time frame, depending on volatility. 

Meanwhile, there are also more than a dozen spot-based XRP ETF filings that will directly track the price of the token. Investment giant Franklin Templeton is already in the race, and other major players of the likes of Fidelity and BlackRock are expected to join.

Last month, as reported by U.Today, the SEC delayed making a decision on several XRP ETFs.