Bitwise’s recent filing for an XRP exchange-traded fund (ETF) has generated considerable buzz in the cryptocurrency market. On September 30, the asset management giant submitted its application through CSC Delaware Trust Company, sparking optimism about the potential approval of an XRP spot ETF. The move came amidst ongoing regulatory uncertainty but signaled Bitwise’s strategic efforts to navigate the challenges that previous ETF applications, such as Bitcoin and Ethereum, have faced with the U.S. Securities and Exchange Commission (SEC).
The announcement didn’t end there. Just one day later, Bitwise filed for an Exchange-Traded Product (ETP), viewed by many as a tactical play to improve its chances of receiving SEC approval. The ETP offers greater flexibility compared to traditional ETFs, making it a potentially smoother path to market. Some experts believe that with this dual-filing strategy, Bitwise could secure approval by the end of 2024 or early 2025.
XRP Price Surge And Mixed Market Sentiment
Bitwise’s filings stirred excitement within the crypto community, as evidenced by a surge in XRP’s trading volume and social media mentions. Data from Santiment shows that XRP’s transaction volume hit a remarkable $2.39 billion, an eight-month high, shortly after the news broke. Social media platforms buzzed with discussions of Bitwise’s ETF filing, reflecting investor hopes for a spot ETF that could unlock broader access to XRP for traditional market participants.
However, the overall market response was more nuanced. While the filing generated initial excitement, XRP’s 30-day Market Value to Realized Value (MVRV)—a metric used to gauge the average returns of active traders—dropped to -9.2%. This marked the lowest level in two months, indicating widespread negative sentiment. Yet, this dip in MVRV has historically been considered an “opportunity zone” by savvy investors, who often accumulate tokens during such periods of low market confidence, betting on a future rebound.
Whale Activity Signals Bullish Outlook
A key indicator suggesting growing optimism for XRP was the spike in whale activity. On October 1, 145 whale transactions exceeding $1 million each were recorded, the highest level in six months. Large-scale investors, or “whales,” often move ahead of broader market trends, and their actions are closely watched as signals for potential market movements. The resurgence of whale transactions could be a harbinger of bullish momentum, as these high-profile investors position themselves for a possible price upswing.
Despite the initial price surge following Bitwise’s filings, market analysts caution that this rally may be short-lived. Drawing parallels to Bitcoin and Ethereum ETF announcements, the early excitement could give way to price corrections, especially if SEC approval faces delays or if the products do not live up to investor expectations.
Legal Challenges Loom Large
Adding another layer of complexity to the situation is the ongoing legal battle between Ripple, the issuer of XRP, and the SEC. In 2023, Ripple secured a partial victory when a U.S. court ruled that XRP sales on secondary markets did not constitute securities transactions. However, the SEC recently filed an appeal challenging that decision, creating further uncertainty around XRP’s regulatory status. The outcome of this legal saga could have a profound impact on the future of Bitwise’s ETF and ETP products, as well as the broader regulatory environment for crypto assets.
Also Read: Ripple’s Legal Tug-of-War – SEC Appeals Ruling As XRP Plummets 12% To 3-Week Low
While Bitwise’s XRP ETF and ETP filings have brought renewed attention to the token, the road ahead remains uncertain. Investors are keeping a close eye on regulatory developments, whale activity, and the token’s price movements. With the potential for both significant gains and market corrections, the coming months could be critical in shaping the future of XRP’s role in the cryptocurrency landscape.
For now, market participants remain cautiously optimistic, awaiting further news from the SEC and Ripple’s legal battle, while positioning themselves for potential opportunities as the landscape unfolds.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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