What is a hedged XRP carry trade, and is anyone running one?

The full answer

What is a hedged XRP carry trade?

A hedged XRP carry trade pairs XRP that a fund owns with a short position in XRP futures of similar size. Bitwise describes its Crypto Carry Fund (USCC) as offering access to “crypto basis strategies, which aim to take advantage of the difference between spot and futures prices,” and says the fund seeks to optimize the yield and manage the risk of “crypto cash-and-carry trades across multiple crypto assets and U.S. Treasury securities” [1].

When the long XRP and the short futures are close in size, a price move on one leg is largely offset by the other. The main source of return left is the gap between the spot price and the futures price. This is why the trade does not depend on a view about where XRP’s price goes. The page on how lenders and market makers hedge XRP price risk covers other hedging tools.

Is anyone running one?

Bitwise’s fund page shows one. As of September 21, 2026 at 4pm EDT, Bitwise reported that USCC held 16,331,438.36 XRP in custody, with a notional value of $25,934,324, or 14.61% of fund assets [1]. On the same date Bitwise listed a short XRP Future OCT26 on Coinbase of 16,150,000, with a notional value of -$26,067,715 [1]. Bitwise also listed an XRP OCT26 1.4 Call on CME with a quantity of 200,000 and a notional value of $48,320 [1].

The short covered about 98.9% of the XRP in custody, leaving about 181,438 XRP not offset by futures. This is computed from Bitwise’s two reported quantities.

The fund is not open to the general public. Bitwise lists eligible investors as Qualified Purchasers in supported jurisdictions, with a $100,000 minimum investment [1]. Bitwise states the holdings are unaudited and that “portfolio holdings will change” at the investment manager’s discretion [1]. The figures above describe one day.

The hedge sits on Coinbase. CME Group has stated that its single-asset crypto futures suite includes XRP futures [2]. Coverage of that market is on the page about CME XRP futures trading.

A second product describes basis trades. Bitcoin.com reported that the Monarq XRP Yield Vault allocates deposited FXRP across options trading, basis and funding-rate arbitrage, and on-chain strategies [3]. One strategy, in the report’s words, “deploys market-neutral basis and funding-rate trades using borrowed stablecoins” [3]. The report gives a target of roughly 3% to 4% a year [3]. It does not describe the vault’s futures positions, so the vault is not counted here as a hedged XRP carry position.

How big has the XRP futures basis been, and what does carry earn?

Only one dated reading is available. Bitwise listed an implied yield of 16.03% on the short XRP OCT26 Coinbase future as of September 21, 2026 [1]. Bitwise defines implied yield as “the annualized yield of the respective holdings if held until maturity, or otherwise not sold” [1].

On the same date, Bitwise listed implied yields on the fund’s other October 2026 futures of 7.43% for bitcoin on Coinbase, 6.72% for ether on CME and 5.11% for Solana on CME, and 17.32% on a September 2026 bitcoin future on Coinbase [1]. Bitwise charges a management fee at an annual rate of 0.75% of the fund’s average daily net asset value [1].

Dividing notional value by quantity gives about $1.588 per XRP for the custody holding and about $1.614 per XRP for the futures leg on September 21, 2026, a gap of about 1.6% to the October contract. No series of earlier basis readings or XRP funding rates is public in the sources used here, so a trend across recent months cannot be stated.

How large is the Bitwise carry position compared with XRP’s market and ETF holdings?

Bitcoin.com reported that across seven funds, custodians held 1,179.62 million XRP, equal to 1.18% of the fixed 100 billion supply, and that Bitwise’s fund held 413.1 million XRP; these are point-in-time figures as reported by Bitcoin.com, in an article whose date was not captured in the evidence records [4].

The 16.33 million XRP in USCC on September 21 was about 1.4% of the seven-fund total, about 4.0% of Bitwise’s fund and about 0.016% of the 100 billion supply. The two dates are a week apart, so these ratios are approximate. Fund totals over time are on the page about how much XRP the US spot ETFs hold.

What happens to carry positions when the basis flips or funding turns negative?

How USCC would fare if XRP futures traded below spot is listed under open questions.

Bitwise states the strategy aims to take advantage of the difference between spot and futures prices [1]. If futures traded at or below spot, that difference would shrink or reverse, and holding XRP against a short future would earn little or lose money before fees. Because holdings change at the manager’s discretion [1], a fund could reduce or close the position in that case, but no public source shows USCC doing so.

Does carry buying support XRP’s spot price, given the matching short?

A fund building this trade buys XRP and sells futures at about the same time. The purchase adds spot demand, while the short adds selling pressure in the futures market of nearly the same size. On Bitwise’s September 21 figures, the net exposure to XRP’s price was the roughly 181,438 XRP not covered by the short, plus the call option. A hedged carry position therefore says little about whether its holder expects the price to rise.

Fund buying in general has not settled price direction either. Bitcoin.com reported that “steady inflows alone have yet to push the price through resistance” [4]. The page on what drives XRP’s price sets out the wider evidence.

Why can’t the futures short be added to XRP holdings?

Bitwise defines notional value as “the Quantity multiplied by the Asset’s last provided price” [1]. The -16,150,000 figure is a contract quantity, not XRP the fund owns. Adding it to the 16,331,438 XRP in custody would count one exposure twice. Hedging lets a fund hold XRP with less price risk, but it does not create XRP. The page on adding ETF, treasury, DeFi and derivatives XRP together explains why derivative notional stays separate from principal.

What is the case against reading much into this?

The documented position is small. At about 0.016% of supply on September 21, 2026, the position does not show that hedged carry is a large use of XRP. Earlier research described hedged carry as a potential multiplier of XRP liquidity capacity; no public source measures that, and the only disclosed example is one fund on one day.

The trade also carries its own risks. Bitwise warns that some of its products “may be subject to the extreme risks associated with investing in crypto assets” [1]. For the Monarq vault, Bitcoin.com reported that users “remain exposed to counterparty, smart‑contract, oracle, and infrastructure risks” [3]. How hedged XRP relates to repo and collateral use continues on the page about XRP ETF shares as repo collateral.