Following the approval of Bitcoin’s spot exchange-traded fund (ETF) on January 11, market speculation has grown around the possibility of similar investment vehicles for major cryptocurrencies, including a spot XRP ETF. However, certain requirements and regulatory considerations must be met before such a development can take place.
Regulatory Requirements for Spot XRP ETF
FOX reporter Eleanor Terret clarifies the matter and states that launching an XRP spot ETF requires the creation of a futures ETF.
In the case of Bitcoin, the approval of spot ETFs was conditional on the Securities and Exchange Commission’s (SEC) finding that the Chicago Mercantile Exchange’s (CME) Bitcoin futures market provided sufficient oversight against fraud and manipulation.
Terret suggests that for XRP to have a spot ETF, a futures ETF must be established first, which is a step in the right direction.
Bloomberg ETF expert James Seyffart shares a similar sentiment: to report that he does not expect an XRP ETF to be launched this year. Seyffart cites the ongoing SEC case against Ripple as a factor influencing his position, suggesting an XRP ETF is more likely to emerge once the regulatory issue is resolved.
Seyffart adds that trading XRP futures on a regulated platform like the Chicago Mercantile Exchange would be a good option condition for the SEC to consider any applications for a spot XRP ETF. Seyffart hints that an XRP futures ETF could also be beneficial in this context.
The SEC has maintained a cautious approach toward spot ETFs containing crypto assets due to concerns about potential market manipulation. Seyffart emphasizes that the availability of XRP futures traded on a regulated platformsuch as the CME, would provide a favorable framework for the SEC’s consideration of a spot XRP ETF, especially given previous court decisions highlighting the correlation between futures and spot markets.
Amid the ongoing speculation, blockchain company Ripple appears to be preparing for possible involvement in the ETF space.
A recent vacancy Posted on Ripple’s website reveals their search for a Senior Manager in Business Development, with a focus on institutional decentralized finance (DeFi). The role involves leading cryptocurrency-related ETF initiatives with internal trading teams and relevant partners.
The future potential of XRP – from $0.5299 to $27?
Crypto market analyst EGRAG crypto has conducted a comprehensive price analysis of the XRP token. Despite a spike in 2023, when the price reached a high of $0.9376 on July 13, the token has returned more than 15% since the beginning of 2024 to a current trading price of $0.5299.
However, according to according to EGRAG, the 21 Exponential Moving Average (EMA) on the monthly time frame is an important indicator for assessing the price movement of XRP.
The analysis focuses on three price levels: $3.5, $6.5 and $27. Based on previous examples (labeled A, B and C), EGRAG extrapolates the potential future price movements using the same percentage increases as in the past.
The first potential scenario is a significant price increase to $27, which represents a massive 4500% increase. This prediction is based on a similar percentage move observed in the past (from the previous example A), as seen in the chart above.
The second scenario suggests a more conservative projection, where XRP may experience a solid 1000% increase to $6.5. This projection is based on historical patterns observed in previous instance B.
In the third scenario, EGRAG expects a significant 500% increase in the price of XRP, to $3.5. Based on previous instance C, this projection indicates significant upside for the token.
Whether the XRP token can successfully surpass the higher resistance levels that have hindered its rise towards the $0.600 mark since late December remains to be seen.
Furthermore, the market is eagerly awaiting a catalyst that could provide a breakthrough in XRP’s seven-month run downward structurewhich could potentially result in a price increase of more than $0.700.
Featured image from Shutterstock, chart from TradingView.com
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