Following the November victory of Donald Trump, the cryptocurrency market experienced a significant surge, largely driven by expectations of a pro-crypto stance from the Republican leadership. Among the cryptocurrencies, XRP witnessed a remarkable rise, climbing 54.65% within a month to reach $2.31. This surge enabled XRP to achieve a market cap of $132.3 billion and a staggering 270% growth over the quarter, securing its position as the fourth-largest cryptocurrency. Although XRP has experienced a slight decline of 4% today, currently trading at $4.25, the long-term outlook remains bullish as trading volume hits new highs.
XRP ETF Approvals: The Latest Buzz
With the upward momentum of XRP, the latest discussions revolve around the approval of XRP ETFs. Leading crypto IRA platform, iTrustCapital, has weighed in on the potential impact, highlighting how these approvals could further boost XRP. Following the approval of Bitcoin and Ethereum spot ETFs earlier this year, XRP is now in the spotlight, with several asset managers filing applications for XRP ETFs.
Bitwise has taken the initiative by filing its S-1 application with the SEC on October 2, 2024. Other companies like Canary Capital, 21Shares, and WisdomTree have followed suit, with WisdomTree filing as recently as December 2. Grayscale Investments and Bitwise are also considering ETF baskets that include XRP, indicating a growing interest in tokenized investment products.
Two Driving Factors of XRP ETFs
iTrustCapital has outlined the benefits of XRP ETFs, focusing mainly on two crucial scenarios: accessibility and oversight. These ETFs would allow investors to access XRP through traditional brokerage accounts while operating within regulated financial markets, offering enhanced investor protection. Additionally, XRP ETFs would present a regulated asset with minimized risk.
However, there are notable challenges. ETFs typically involve limited trading hours, non-direct ownership of XRP, tracking errors, and high fees, which might deter some investors.
The Impact of XRP ETFs on the Crypto Market
The potential approval of XRP ETFs could significantly influence XRP’s demand and supply dynamics. Institutional investors would need to acquire substantial quantities of XRP to support these funds, potentially driving up buying pressure and sparking a price increase. Furthermore, the launch of XRP ETFs could boost market attention and institutional adoption, positioning XRP as a key player in traditional finance. This recognition could attract a new wave of interest and investment into the token.
When Could XRP ETFs Go Live?
The exact timeline for the official launch of XRP ETFs remains uncertain, but speculation suggests they could debut in 2025 under a potentially crypto-friendly SEC leadership. With pro-crypto advocate Paul Atkins as SEC Chair, the market is optimistic for an early approval once Trump takes office. Similar to how Bitcoin ETFs have revitalized the crypto market this year, XRP ETFs are anticipated to follow suit. With Solana ETFs also in the race, it will be intriguing to see who gains the first mover advantage next year after Bitcoin.
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