The race for crypto ETFs is heating up and XRP is once again in the spotlight. With Paul Atkins taking over as the new chairman of the US Securities and Exchange Commission (SEC), investors are hopeful of a more crypto-friendly attitude.
Multiple asset managers have already filed ETF applications, and as key SEC ETF approval deadlines approach, both the XRP ETF and the Solana (SOL) ETF are emerging as leading contenders due to their growing liquidity and rising investor interest.
Why Market Depth Matters for XRP ETF Approval
Unlike trading volume, which only reflects the quantity traded, market depth measures how much can be bought or sold without significantly affecting the price. Analyst WrathofKahneman explained that for ETF approval, market depth is even more important than volume, as it ensures stability during large-scale trades.
A Kaiko Report April showed that XRP and Solana (SOL) lead among the major exchanges with 1% market depth, while Cardano (ADA) follows closely. This deep liquidity strengthens XRP’s ETF case, pointing to smoother trading and reduced volatility. If approved, ETFs that physically hold XRP would further increase liquidity through the constant creation and redemption of ETF shares, thereby increasing price stability.
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Ripple’s $1.25 billion acquisition of Hidden Roada major digital asset brokerage, adds significant institutional depth to the XRP ecosystem. This strategic move broadens XRP’s appeal to large-scale investment products such as spot XRP ETFs, strengthening its market positioning among institutional investors.
Despite the optimism surrounding the approval of XRP ETFs, overall market sentiment remains cautious. Data on deribit options shows traders are hedging against downside risk, indicating near-term uncertainty. In addition, China’s 125% tariffs on US goods have increased global financial tension, further depressing risk appetite.
Upcoming XRP ETF List
A decisive week lies ahead for XRP. Six spot XRP ETF applications will be reviewed between October 18 and 25, including Grayscale’s ETF, whose SEC decision is expected this week.
Other filings from 21Shares, Bitwise, WisdomTree, CoinShares and Canary Capital are also queued for review next week. These rulings will mark a turning point for XRP’s regulatory prospects, potentially reshaping the crypto ETF landscape.
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Frequently asked questions
An XRP ETF is a fund that tracks the price of XRP, allowing investors to gain exposure without directly owning the crypto. It is important because it provides easier, regulated access for mainstream and institutional investors.
Major SEC decisions on several spot XRP ETF filings are expected between October 18 and 25, 2024, starting with a ruling on Grayscale’s filing this week.
A spot XRP ETF provides security through regulated custodians, simplifies investing through traditional investment accounts, and improves market liquidity and price stability for all holders.
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