Ripple ETF (TOXR.US) was hit hard: redemption led to a loss of 13.4 million, and the market capitalization fell short

According to Woofun AI, 21Shares' Ripple ETF (TOXR.US) is facing a serious existential crisis. In the first half of the year, due to a chain reaction caused by large-scale redemptions by investors, the fund recorded a loss of about 13.4 million US dollars, and the overall asset size shrank slightly.

The root cause is a serious imbalance in the direction of capital flows. In the first half of the year, the total amount of redemptions and disbursements of the fund reached 75 million US dollars, while the newly issued capital was only 25.5 million US dollars, resulting in a negative net capital difference of 49.5 million US dollars. Specifically, the fund issued a total of 1.47 million shares, but experienced a wave of redemptions of 4.25 million shares.

This passive situation forced the management to sell off XRP holdings at a loss price. WooFunai compiled data showing that the resulting realized loss reached 13.36 million US dollars. Coupled with the remaining positions faced unrealized depreciation losses of 71.52 million US dollars, the net value of the fund suffered a double blow.

Looking at the quarterly pace, the first quarter was the peak of redemptions, with 4.03 million shares concentrated in the total redemption volume of 4.25 million shares. Despite the current turnaround in the second quarter, 480,000 new shares were issued from April to June, 220,000 shares were redeemed, and a net issuance increase of 260,000 shares was achieved.

However, the improvement in fundamentals failed to offset the downside risk of the market. The XRP price fell by 22.37% during the same period, directly dragging down the fund's net asset value (NAV) by 20.56%. The brief recovery did not translate into a substantial recovery.

The latest data reveals a weak recovery. As of August 11, the total number of TOXR shares was 11.12 million shares, a slight increase of 10,000 shares compared to June. In terms of asset size, the newly announced US$109.58 million is lower than the US$112.9 million at the end of the quarter. This shows that even with a correction in issuance in the second quarter, the size of the fund continues to shrink, and it will take time to rebuild investor confidence.