The race to launch XRP-focused exchange-traded funds (ETFs) has just gone overdrive. Major asset managers are filing with the U.S. Securities and Exchange Commission (SEC) to launch these crypto-backed financial products, the question on everyone’s mind is: Will XRP be the next big thing?
Now ranked third by market capitalization, XRP has never been a stranger to volatility. However, data extracted from the latest filings reveal that large investors are ready to bet on Ripple’s XRP.
Asset managers like WisdomTree, 21Shares, Bitwise, and Canary Capital have filed for permission from the SEC to list the XRP ETF. These funds seek to offer retail and institutional investors access to regulated XRP, a step forward for the crypto space.
The Power of XRP ETFs
Overall, for most institutional investors, an ETF is a safer bet because it brings them closer to cryptocurrencies but in a risk-free environment.
WisdomTree has filed an S-1 to launch an XRP ETF that tracks the value of XRP in real time. The fund would be an exchange-traded fund traded on the Cboe BZX Exchange, with BNY Mellon as the administrator.
Likewise, 21Shares has registered for its Core XRP Trust; this is another spot-based ETF aimed at bringing exposure to the cryptocurrency through Coinbase Custody Trust Company as the custodian.
These filings come a few months after Bitwise tried to list the first XRP ETF, which underlines the increasing sentiment of optimism about Ripple’s future.
Still, the pathway to XRP ETFs has not been smoother, with multiple regulatory challenges at present, such as the legal issues between the SEC and Ripple.
Institutional Confidence in XRP Growing
Ripple’s chief executive officer Brad Garlinghouse expressed his excitement at more institutional players getting involved in the XRP ecosystem.
Over $33 billion poured into Bitcoin ETFs in 2024 alone, and Garlinghouse sees room for XRP-based ETFs to open a similar floodgate. These would also improve the cross-settlement and liquidity of XRP and act as a magnet to fresh entrants in the crypto market.
Similar to Garlinghouse’s comments, another XRP investor, Bitwise Asset Management’s Chief Investment Officer Matt Hougan, noted that the cryptocurrency has yet to reach its full potential because of the existing regulatory hurdles.
She believes that XRP’s ledger technology and its large fan base will ultimately drive its future growth and usage once the regulators weigh in.
Nevertheless, despite the filings, several hurdles remain to be crossed. The SEC’s ability to appeal the Ripple ruling remains a cause for concern regarding when it will be approved.
The crypto community still believes that a change of guard and a new pro-crypto SEC chairperson will result in less pressure and, who knows, maybe the green light for XRP ETFs.
This new wave of crypto regulation policy, which the SEC is expected to institute, is believed to be friendly to Ripple and XRP.
The current SEC chairman is Gary Gensler, who has been quite strict on cryptocurrencies and XRP in particular. He recently resigned from his position, and Trump’s nominee Paul Atkins will be the next chairman. Some people believe that this kind of change could lead to the passage of clear rules that will allow XRP ETFs.
XRP’s Price Potential
The filings have also elicited renewed attention to the XRP price. XRP, which had dropped to 20% from its yearly high of $2.9, has demonstrated market activity recovery in recent weeks.
Moreover, now on-chain data shows that approximately $315 million in XRP has been transferred from exchanges to other categories, which may be a positive sign for the future.
If the market can break the $2.4 resistance level, analysts predict XRP could surge by 20%, reaching the $3 mark. Whale activity and market sentiment suggest that a rally could be imminent.
The ETF filings are not just regulatory approvals; the institutional players are indicating they are becoming increasingly bullish about the XRP assets.
Based on the demand side, institutional adoption, and a positive outlook for the regulation of XRP ETFs, it is not entirely impossible to consider the fact that XRP ETFs may one day turn the tables in the crypto market.
While the SEC continues to examine these filings, the market is waiting for an influx of capital that will push XRP to the next phase of its rally. The question remains: Where is the next big thing? XRP ETFs?
