Though it has long been a competitor in the cryptocurrency space, Ripple’s XRP’s route to becoming an exchange-traded fund (ETF) is still unclear. Although XRP has its own set of difficulties, Bitcoin has taken center stage among ETFs. Could a futures ETF hold the key to enabling XRP to reach its full potential?
Taking After Bitcoin’s Lead:
Do you recall the tale of the Bitcoin spot ETFs? Regulation-related worries posed significant obstacles, especially with regard to market manipulation. Eventually, the Securities and Exchange Commission (SEC) gave in, but only after concluding that the CME Bitcoin futures market was stable enough to warrant appropriate oversight.
In order to have an $XRP spot ETF, there will first need to be a futures ETF.
Part of getting the $BTC spot ETFs approved was the @SECGov concluding that the CME bitcoin futures market would suffice to provide surveillance for fraud and manipulation.
If $XRP gets a futures ETF… https://t.co/MPFVSherXK
— Eleanor Terrett (@EleanorTerrett) January 27, 2024
This is when the intriguing analogy appears. An XRP futures ETF would serve a similar purpose, as FOX reporter Eleanor Terrett rightly notes. It might allay the SEC’s concerns over manipulation and fraud in the underlying XRP spot market by creating a regulated market with open pricing and trade.
Opening Up to the Institutional Mass:
Because they are accustomed to traditional financial instruments, institutional investors find futures exchange-traded funds (ETFs) particularly appealing. The emergence of an XRP futures exchange-traded fund (ETF) has the potential to draw major stakeholders and infuse the XRP ecosystem with essential legitimacy and liquidity.
The Ripple Effect:
A new job advertisement from Ripple looking for someone to “promote cryptocurrency-related ETF plans” adds gasoline to the speculative flames. Is this a subliminal indication of their plans to maneuver through the ETF waters? Even if Ripple won’t comment, the position’s very existence is telling.
All Sunshine and Rainbows, But Not Though there is hope, there are a few storm clouds in the distance:
The SEC v. Ripple Lawsuit: There is a long-lasting legal dispute on whether or not XRP qualifies as a securities. If Ripple wins, this might greatly improve its ETF prospects; if it loses, this could cause them to collapse.
Regulatory Uncertainty: Laws pertaining to cryptocurrencies are still subject to change, and this could affect when an XRP ETF is released Approval.
A Positive Step for the Future:
An XRP spot ETF has significant potential benefits despite its difficulties. It might increase XRP’s stability, make it more well known, and strengthen its place in the world financial system.
The events surrounding Bitcoin spot ETFs and Ripple’s possible involvement imply that an XRP futures ETF (and eventually a spot ETF) might not be a pipe dream, despite the path being far from easy. Eleanor Terrett correctly notes, “If XRP gets a futures ETF, it’s a step in the right direction to one day getting a spot.”
