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Following the successful introduction of the spot Bitcoin ETF this month, analysts are now contemplating the possibility of similar products for leading altcoins like Ethereum (ETH) and XRP. Although the prospects of a spot XRP ETF this year are diminishing, Fox Business journalist Eleanor Terret has put forward an intriguing proposal.
Ripple Should First Launch XRP Futures ETF
Terrett delves into the regulatory landscape surrounding XRP, shedding light on the prerequisites for the approval of an XRP spot ETF.
Terrett emphasizes a crucial precursor, noting that the approval of a futures ETF for XRP is a necessary step before the possibility of an XRP spot ETF. Drawing parallels with the approval process for spot Bitcoin ETFs, Terrett highlights that regulatory authorities, such as the U.S. Securities and Exchange Commission, deemed the existence of a futures market on the Chicago Mercantile Exchange (CME) sufficient for surveillance against fraud and manipulation.
Terrett suggests that if XRP successfully secures approval for a futures ETF, it would mark a significant stride in the right direction. This incremental step could pave the way for the eventual approval of an XRP spot ETF, signaling positive developments for the cryptocurrency in the regulatory sphere.
This was exaclty the same path that helped Bitcoin applicants have a spot ETF in the market. Bloomberg Intelligence analyst James Seyffart had also shared similar opinion earlier this month.
“We have futures already trading in the CME that are regulated by the CFTC, which is a regulated market, and then we have the futures ETFs, which also are kind of like pushing this thing along as well. We don’t have any of that for Ripple,” he said. Conversely, Seyffart suggests that a spot XRP ETF could become operational in 2025, provided there is increased regulatory clarity.
Legal Hurdles For Ripple
All eyes are currently on the ongoing legal battle between the US SEC and Ripple over the institutional sales of XRP. The decision for the same is likely to arrive by the final court hearing this year in April 2024.
Citing the ongoing lawsuit, some analyst argue that the decision for a spot XRP ETF seem to be very slim. Thus, an XRP ETF is only possible is the SEC grants the crypto a non-security status. On the other hand, investors’ interest for this altcoin continues to grow with time.
According to Santiment, the XRP Ledger currently boasts 5.02 million unique wallets holding more than 0 XRP coins, marking a significant milestone in its decade-long history of public trading. As the sixth-largest asset in the cryptocurrency market by market capitalization, it has witnessed a notable increase, more than doubling the number of such wallets in the past three years, representing a growth of 104% as the network continues to expand.
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