Spot XRP ETF ‘not going to happen anytime soon’ say analysts
While there's a possibility that exchange-traded fund (ETF) issuers may want to offer a spot XRP (XRP) ETF, investors shouldn't hold their breath for regulatory approval “soon.”
Speaking to Cointelegraph, analysts said the ongoing case against Ripple from the Securities and Exchange Commission and the lack of an approved XRP futures ETF product will seriously hurt the possibility of acquiring an XRP ETF.
CoinShares head of product Townsend Lansing explained that unless the SEC is forced or agrees to recognize XRP as a security, the XRP ETF cannot be implemented.
A judge filed against Ripple by the SEC in July ruled that XRP is not a token security but is sold to institutional buyers. The fight between the two continues and a trial in the case is scheduled for April 23.
Scott Johnson, general partner at Van Buren Capital, also said he sees the chances as “very slim” and is looking for new leadership at the SEC. Others, like CoinShares research analyst Max Shannon, have pointed out that it took more than a decade for Spot to approve a Bitcoin ETF.
Earlier this month, Bloomberg ETF analyst James Seifert shared confidence in the latest XRP ETF. In an interview with Thinking Crypto's Tony Edwards on Jan. 11, Seifert said the ETF is a “remote possibility” and he doesn't expect the SEC's ongoing case against Ripple this year.
Seifert noted that unlike Bitcoin and Ethereum, there are currently no authorized XRP futures ETFs in the US.
On the subject, Johnson argues that even if a financial exchange like CME were to list XRP futures tomorrow, the SEC would require years of high correlation between XRP futures and the spot market before approving a spot ETF to validate watch-sharing agreements. And fraud in the spot market” – just like what happened to the spot Bitcoin funds.
XRP investors still have hope.
However, analyst pessimism has not dampened optimism from some of XRP's more enthusiastic supporters in recent weeks.
In January, Ripple CEO Brad Garlinghouse appeared playful when asked if one was on the way in an interview at the World Economic Forum in January, days before, some saw BlackRock CEO Larry Fink smile as he dismissed a similar question on Fox Business. Charles Gasparino.
BOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!
@Ripple CEO Brad Garlinghouse is telling you the #XRP ETF is coming! pic.twitter.com/bKgLo0qCfR
— JackTheRippler ©️ (@RippleXrpie) January 16, 2024
Hopes were ultimately dashed after Gasparino reported that BlackRock had no plans for a spot XRP ETF, citing people with “direct knowledge of the matter.”
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Meanwhile, Franklin Templeton's head of digital assets, Sandy Kaul, hinted in an interview on January 11 that they will be offering clients more opportunities to invest in crypto, and she anticipates “more offerings from us at some point” — which is up. I hope other crypto ETF documents will come.
Whether the XRP fund comes or not, the industry is focused on the potential approvals of Spot Ether (ETH) ETFs, with Bloomberg ETF analyst Eric Balchunas projecting a 70% chance of approval in May.
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