Ripple
Will an XRP ETF follow Bitcoin ETF approval? Here’s what to expect
Posted:
| Last updated: February 6th, 2024
Journalist
- XRP’s regulatory clarity could aid its cause in the case of a spot ETF proposal.
- Its price has gone below its post-SEC victory range.
The Bitcoin [BTC] spot ETF is generating excitement as various parties eagerly await approvals. After the spot BTC ETF receives final approval, will applications for others, such as an XRP spot ETF, follow suit?
Spot XRP ETF?
Amid the discussions surrounding the potential approval of a spot Bitcoin ETF, there are speculations about a spot ETF proposal for assets like Ripple’s XRP.
Steven McClurg, the Chief Investment Officer of Valkyrie Funds, expressed this idea in a recent interview. He suggested that it would not be surprising to see XRP and Ethereum spot ETFs entering the market.
This position is based on the imminent approval of the spot BTC ETF. How might a spot ETF proposal affect XRP?
Possible impact of a spot XRP ETF proposal
Observing the historical trend of Bitcoin’s price, XRP could experience notable price changes upon submitting a spot ETF proposal.
The initial price movement would likely be a result of anticipation surrounding the potential approval, which would lead to speculation. Subsequent price shifts would be influenced by reactions to any news related to the proposal, whether authentic or misleading.
Furthermore, the most significant price surge might occur upon approval. This would be marked by a combination of institutional investment inflows and the anticipation of a substantial price increase.
Making a case for the approval or rejection of a spot XRP ETF
XRP stands out among crypto assets for having achieved a degree of regulatory clarity. The clarity is due to its partial victory against the SEC.
While this could be a compelling point in favor, it also introduces a potential counterargument.
In 2023, a ruling declared that XRP, at least in part, was not considered a security. However, the SEC has not yet filed an appeal, and additional rulings in the case are pending.
The approval of any spot ETF proposal falls under the jurisdiction of the SEC, and the ongoing case against Ripple may influence their decision.
Despite the initial ruling, the situation remains dicey for Ripple. Recent events suggest a positive trend, such as XRP’s relisting on major exchanges and its inclusion in the Grayscale Large Cap Fund.
Nevertheless, it is evident that if a proposal emerges, the path to approval is unlikely to be straightforward.
XRP continues to trade downward
Following the ruling on 13th July 2023, XRP experienced a significant rise in price, climbing from around $0.4 to a peak of $0.8.
Subsequently, the price stabilized around $0.6 for an extended period until it dipped below this range in January.
Read Ripple (XRP) Price Prediction 2024-25
The daily timeframe chart shows a notable decline of over 6% that occurred over two days.
As of this writing, the Ripple token was trading at around $0.56, reflecting a decline of less than 1%. Despite the slight decline, it marked the second consecutive day of a negative price move.
Source: TradingView
