- Amplify filed for the first XRP Option Income ETF, blending XRP price exposure with weekly covered calls for steady income.
- The SEC is reviewing over 90 crypto ETF applications, including spot products for XRP, Solana, and Litecoin.
- Distributions will be taxed as ordinary income, with NAV calculated daily and options managed through FLEX contracts.
Amplify Investments is looking to break new ground with a first-of-its-kind ETF that blends crypto price tracking with steady option income. The proposed Amplify XRP Option Income ETF aims to generate monthly cash flow by selling covered calls on XRP-linked products, while still maintaining exposure to XRP’s underlying price. If approved, it will list on the Cboe BZX Exchange, joining the growing wave of crypto ETFs currently waiting for regulatory clearance.
A Twist on Traditional Crypto ETFs
Unlike the typical spot ETF that just mirrors price movements, this one has a dual structure. The ETF will invest at least 80% of its assets into XRP-related products — including ETPs that track XRP price and hold it in secure digital vaults — and at the same time, run a covered call strategy. That means selling call options slightly out of the money, usually 5–10%, with weekly expiries. The plan is to maintain a consistent income stream from premiums, while keeping exposure to potential XRP upside.
Amplify will run part of the fund through a Cayman Islands subsidiary to give it flexibility with crypto holdings while staying within U.S. investment company rules. This setup helps meet tax obligations and valuation requirements under the 1940 Act, something traditional ETFs have to follow closely.
SEC Overloaded with Crypto ETF Filings
This filing comes at a time when the SEC is drowning in crypto ETF applications — more than 90 are currently in review. Names like Grayscale and 21Shares have filed for spot ETFs tied to XRP, Solana, and Litecoin. Interest has spiked since July, when the SEC greenlit in-kind creations and redemptions for crypto ETFs, opening the door for more sophisticated structures.
Amplify seems confident that the tide is shifting. While spot ETFs attract traders looking for direct exposure, this XRP ETF takes a different angle: offering predictable income streams via option premiums. That design could appeal to investors less focused on speculation and more on steady cash flow.
Tax and Valuation Details
The prospectus also digs into how distributions will be taxed. Payouts will be treated as ordinary income, while any capital gains are automatically considered long-term. Some distributions could even be classified as return of capital, adjusting cost basis for investors.
For valuation, NAV will be calculated daily using market quotes when they’re available, or fair value pricing if liquidity is thin. Amplify has appointed itself as the valuation agent, with strict internal procedures to ensure accurate pricing during volatile or inactive trading periods. FLEX Options — customizable and exchange-traded — will be the main tool for covered call positions, though the fund may use standard listed options when needed.
A New Flavor of Crypto Yield
If the SEC signs off, the Amplify XRP ETF would stand as a fresh entry into the market — not just tracking XRP’s price, but actively generating income on top of it. For investors chasing yield in a crypto-heavy world, this could be the middle ground between pure speculation and traditional finance.
