Analyst Says ripple Should Have XRP Futures ETF Before Launching Spot ETF
Following the successful launch of the Spot Bitcoin ETF this month, analysts are now considering the possibility of similar products for leading altcoins such as Ethereum (ETH) and XRP. Although expectations for the spot XRP ETF have faded this year, Ethereum journalist Eleanor Terret has put forward an intriguing proposal.
Ripple Should Launch XRP Futures ETF First
Fox Business reporter Eleanor Terrett examines the regulatory environment surrounding XRP and sheds light on the prerequisites for approval of an XRP spot ETF.
Terrett highlights a very important premise and states that the approval of a futures ETF for XRP is a necessary step before the possibility of an XRP spot ETF. Drawing parallels with the approval process of spot Bitcoin ETFs, Terrett emphasized that regulatory authorities such as the US Securities and Exchange Commission find the existence of a futures market on the Chicago Mercantile Exchange (CME) sufficient to monitor against fraud and manipulation.
Terrett suggests that if XRP were to successfully gain approval for a futures ETF, it would be a significant step in the right direction. This incremental step could pave the way for final approval of the XRP spot ETF and signal positive developments for the cryptocurrency in the regulatory arena.
This is exactly the same way that helped Bitcoin applicants own spot ETFs in the market. Bloomberg Intelligence analyst James Seyffart shared a similar view earlier this month.
“We have futures contracts on CME that are regulated by the CFTC, which is already a regulated market, and we also have futures ETFs that are kind of pushing this thing forward. “We don’t have any of that for Ripple,” he said. Conversely, Seyffart suggests that the spot XRP ETF could become operational in 2025, provided regulatory clarity improves.
Legal Obstacles for Ripple
All eyes are currently on the ongoing legal battle between the US SEC and Ripple over the institutional sale of XRP. The same decision is expected to come at the final hearing to be held in April 2024 this year.
Citing ongoing litigation, some analysts argue that the spot XRP ETF decision looks very weak. Therefore, an XRP ETF is only possible if the SEC grants the crypto a non-security status. On the other hand, investors’ interest in this altcoin continues to increase over time.
According to Santiment, XRP Ledger currently has 5.02 million unique wallets holding more than 0 XRP tokens, marking a significant milestone in its ten-year history of public trading. As the sixth-largest asset in the cryptocurrency market in terms of market capitalization, it has witnessed a remarkable increase in the number of such wallets over the past three years, more than doubling, representing a growth of 104% as the network continues to expand.
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Bhushan is a FinTech enthusiast and has a good ability to understand financial markets. His interest in economics and finance draws his attention to the emerging Blockchain Technology and Cryptocurrency markets. He is in a constant learning process and motivates himself by sharing the knowledge he has acquired. In her spare time, she reads thriller novels and sometimes explores her culinary skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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