Leading American crypto IRA platform iTrustCapital recently highlighted the upcoming launch of XRP ETFs and shared key insights to inform investors about this potential development.
Following the approval of multiple Bitcoin and Ethereum spot ETFs earlier this year, investors have been speculating that XRP could be the next token to receive the SEC’s blessing for an ETF.
This speculation gained momentum recently, with multiple asset managers submitting separate applications to launch XRP-linked ETFs. Bitwise was the first asset manager to submit an S-1 application with the SEC on October 2 for a spot XRP ETF.
Afterward, Canary Capital followed suit, submitting its own XRP ETF application a week later, precisely on October 9, 2024. Asset managers 21Shares and WisdomTree followed suit, communicating their intent to launch XRP ETFs in the U.S. While 21Shares submitted its S-1 application on November 1, WisdomTree filed on December 2.
Meanwhile, asset managers like Grayscale Investments and Bitwise are also seeking to launch ETF baskets tied to several cryptos, including XRP.
Essential Information on Incoming XRP ETFs
Given the growing momentum surrounding the potential launch of XRP ETFs, iTrustCapital offered a comprehensive overview of the product. It defines an XRP ETF as an investment vehicle that tracks the price of XRP and holds the underlying asset on behalf of investors.
The Spot $XRP ETF is expected to launch soon! 👀
► Here’s what you need to know before the release: https://t.co/IoYqD0nL8o pic.twitter.com/xwoz7vfXL6
— iTrustCapital (@iTrustCapital) December 26, 2024
Pros and Cons of XRP ETF
According to iTrustCapital, potential XRP ETFs offer investors two major benefits: accessibility and oversight.
The accessibility feature allows investors to access the investment product through brokerage accounts. For the oversight, the product operates under traditional financial markets, offering investors better protection.
Despite these benefits, iTrustCapital highlighted four major drawbacks of the ETF: limited trading hours, non-direct ownership of XRP, tracking errors, and high fees.
Potential Impact of ETF on XRP
The potential approval of spot-based XRP ETF could directly impact XRP markets, influencing the token’s demand and supply. This could play out in two scenarios: increased institutional demand and broader market attention.
Potential fund managers of XRP ETFs must hold substantial amounts of the token to back the investment vehicle. With more investors entering the market, the fund managers could acquire more XRP tokens, potentially creating buying pressure for the asset. This growing demand could serve as a catalyst for a potential price surge for XRP.
In terms of market attention, the potential approval of an XRP ETF could increase awareness of the token. Following the product’s approval, many will recognize XRP as a major asset that traditional financial institutions adopt. Hence, it could position XRP for a new wave of interest and investments.
Timeline for Approval
In the meantime, there is no official timeline for the potential approval of the XRP ETF applications. However, speculations suggest that the investment vehicle could go live next year under a new SEC leadership chaired by pro-crypto advocate Paul Atkins.
U.S. President-elect Donald Trump has already nominated Atkins as his SEC Chair. Consequently, the crypto community is optimistic that his administration will be a blessing to the crypto industry, giving birth to favorable regulations and more crypto ETFs, with some tied to XRP.
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