XRP enthusiasts hoping for a quick path to a spot ETF may need to adjust their expectations. Analysts warn that despite recent whispers and optimistic speculation, regulatory hurdles and ongoing legal battles make an imminent approval highly unlikely.
The Securities and Exchange Commission (SEC)’s long-standing lawsuit against Ripple, coupled with the absence of a sanctioned XRP futures ETF market, throw cold water on the chances of a swift green light from the regulator. As CoinShares head of product Townsend Lansing bluntly states,
“an XRP ETF wouldn’t be feasible unless the SEC was forced to or agreed to concede that XRP is not a security.”
July 2023’s court ruling, deeming XRP a security for institutional sales but not retail exchanges, adds to the uncertainty. With a trial looming in April and the SEC expected to appeal the retail ruling, analysts see little room for immediate ETF progress.
“Very slim” is how Van Buren Capital partner Scott Johnsson characterizes the possibility, suggesting a change in SEC leadership might be a prerequisite. CoinShares research analyst Max Shannon echoes this cautious outlook, reminding everyone that even Bitcoin, the undisputed king of crypto, took over a decade to secure its spot ETF.
Bloomberg ETF analyst James Seyffart adds to the chorus of doubt, calling an XRP ETF a “remote possibility” and unlikely for 2024. He further highlights the lack of an XRP futures ETF in the US, a crucial factor considering the SEC’s stringent requirements for spot ETF surveillance and market integrity.
While analysts temper enthusiasm, a glimmer of hope persists among die-hard XRP fans. Ripple CEO Brad Garlinghouse’s Davos evasiveness regarding an ETF and cryptic smiles from executives like BlackRock’s Larry Fink have fueled speculation. However, reality checks from Gasparino and BlackRock itself dampen these rumors.
Franklin Templeton’s Sandy Kaul, hinting at broader crypto offerings in the future, might offer a faint consolation for those craving XRP exposure. Nonetheless, the industry’s immediate focus rests on the potential approval of spot Ether ETFs, with optimism reaching 70% for a May launch, according to Bloomberg analyst Eric Balchunas.
For now, XRP investors should prepare for a lengthy wait. The quest for an ETF might be a marathon, not a sprint, demanding patience and a close eye on the ever-evolving regulatory landscape.