Over the past year, XRP has fallen by 3.74%, largely due to its ongoing legal fight with the U.S. Securities and Exchange Commission (SEC) and the resulting market uncertainty. However, the approval of an XRP exchange-traded fund (ETF) could bring much-needed stability and boost the cryptocurrency’s credibility. This move might position XRP as a more stable and undervalued asset in the market.
Will XRP ever enjoy the same credibility and institutional backing as Bitcoin and Ethereum? Maybe. Read on!
Ripple CEO Brad Garlinghouse is confident that an XRP ETF will be approved soon. Despite the unresolved legal dispute with the SEC, he remains optimistic, pointing to rising interest in XRP from both institutional and retail investors. In a recent interview with Bloomberg, he described an XRP ETF as “inevitable,” especially given the approval of Bitcoin and Ethereum ETFs, which have set a regulatory precedent.
The Ripple vs. SEC legal battle is at a crucial stage, and it’s affecting XRP’s price performance. An approved XRP ETF, or even a possible initial public offering (IPO) for Ripple, could change the game for the cryptocurrency. Let’s take a look at why XRP ETFs are gaining traction and their potential impact.
Fund managers like Bitwise and Canary Capital have already submitted applications for XRP-based ETFs, aiming to bring the cryptocurrency into mainstream investments. If approved, these ETFs would allow investors to gain exposure to XRP by trading on stock exchanges without actually holding the asset. This approach mirrors the strategies used for Bitcoin and Ethereum, indicating a push to expand crypto investment options.
Despite progress, Ripple’s legal dispute with the SEC still presents a challenge. The $1.3 billion lawsuit, filed in 2020, accuses Ripple of selling unregistered securities through XRP. In 2022, Ripple won a partial court victory when a judge ruled that XRP sales to retail investors were not securities, although institutional sales were still considered unregistered.
Ripple was initially fined $125 million, a significant reduction from the SEC’s $2 billion request, which many in the crypto industry interpreted as a major win for the company. Ripple’s Chief Legal Officer Stuart Alderoty believes the SEC’s ongoing appeal will backfire and has expressed confidence in Ripple’s legal standing.
Currently priced at $0.51, XRP remains far below its all-time high of $3.40 reached in 2018. Still, Garlinghouse’s optimism about an ETF approval is based on what he sees as strong demand for XRP, especially as more institutional investors look to gain exposure. An XRP ETF would mark a significant milestone, putting the cryptocurrency alongside Bitcoin and Ethereum in the regulated investment space.
Despite the optimism, regulatory issues may delay the approval of an XRP ETF this year.
Ongoing legal challenges and XRP’s current low price could deter some institutional investors from jumping in right away. For now, the future of XRP ETFs remains uncertain, but a breakthrough could be coming.
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