Potential Approval of XRP and Ethereum ETFs on the Horizon
In a recent Bloomberg interview, Steve McClurg, co-founder and chief investment officer of Valkyrie Funds, has suggested that the approval of Ethereum or XRP exchange-traded funds (ETFs) may follow the expected launch of spot Bitcoin ETFs.
The U.S. Securities and Exchange Commission (SEC) is reportedly likely to approve Valkyrie’s Bitcoin ETF, with trading anticipated to begin soon.
Market Developments Support Optimism for XRP and Ethereum ETFs
McClurg’s optimism is supported by recent market developments. He pointed out Grayscale’s addition of XRP to one of their publicly traded trusts, which indicates increasing interest in diversified cryptocurrency investment products.
Potential Challenges for XRP and Ethereum ETFs
While Bitcoin has been categorized as a commodity, XRP and Ethereum are considered securities. This distinction may lead to potential challenges and a more complex approval process for ETFs tied to these assets.
The SEC’s cautious stance on the broader crypto market may also pose additional obstacles for ETFs linked to XRP and ETH.
Crypto Firms Optimistic About Spot Bitcoin ETF Approval
Around a dozen companies have submitted applications for spot Bitcoin ETFs, expecting their approval to attract new investors and significant inflows within the first year.
The cryptocurrency has reached a 21-month high this year due to expectations of imminent approval. The SEC faces a deadline of January 10 to decide on an application by Ark 21 Shares.
Although Valkyrie has yet to receive any indication from the SEC, McClurg expressed confidence that their Bitcoin ETF will be trading on Thursday.
In response to the changing landscape, several firms have adjusted their fees in their applications for spot Bitcoin ETFs, as shown in updated filings with the SEC.
Hot Take: Potential Impact on the Crypto Market
The potential approval of Ethereum and XRP ETFs could have a significant impact on the crypto market. It would provide more accessible investment options for investors interested in these cryptocurrencies, potentially leading to increased demand and price appreciation.
However, the SEC’s cautious approach and the challenges associated with categorizing XRP and Ethereum as securities may pose hurdles for the approval of these ETFs. Nonetheless, if approved, they could further legitimize and expand the reach of these digital assets.
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