An XRP ETF Faces Hurdles
According to crypto market analysts, there are several key factors that need to happen before the Securities and Exchange Commission (SEC) can approve a Spot XRP ETF. CoinShares’ head of product, Townsend Lansing, believes that the SEC needs to agree that XRP is not a security. Additionally, Van Buren Capital general partner Scott Johnsson thinks that the likelihood of the Commission approving such a fund is low. Both Lansing and CoinShares research analyst Max Shannon suggest that it may take a considerable amount of time for an XRP ETF to be introduced, based on the lengthy approval process for Spot Bitcoin ETFs.
Bloomberg analyst James Seyffart also expressed doubts about an XRP ETF launching soon, citing the ongoing SEC case against Ripple as a hindrance. He believes that the case needs to be resolved before an XRP ETF can be approved. Seyffart also mentioned last year that XRP should be listed on the Chicago Mercantile Exchange (CME) for better chances of SEC approval.
The SEC’s Opinion and Ripple’s Case
The SEC’s opinion on whether XRP is a security might not hold much weight since the court has already ruled against classifying it as such. However, the SEC would likely proceed cautiously in using this as a reason to deny an XRP ETF application. The ongoing case against Ripple also cannot be used as a determining factor for approving an XRP ETF, as demonstrated by Grayscale’s precedent in challenging arbitrary decisions by the SEC.
James Seyffart raises a valid point about potential price manipulation being a concern for the SEC. This is where trading XRP on a regulated market like the CME becomes important, as it allows for surveillance-sharing agreements that can address this issue.
Hot Take: XRP ETF Approval Hinges on Regulatory Clarity
Before an XRP ETF can be approved, regulatory clarity regarding XRP’s security status is crucial. The SEC needs to agree that XRP is not a security, which would open the door for potential ETF approval. However, the ongoing case against Ripple and concerns about price manipulation may further delay the process. Additionally, listing XRP on regulated exchanges like the CME could strengthen the case for an XRP ETF by addressing surveillance and market manipulation concerns. Overall, until these key factors align, it is unlikely that an XRP ETF will be approved in the near future.
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