Investment Analysts Project Delay in Spot XRP ETF
Investment analysts are reflecting on the journey taken by the US to realize spot Bitcoin exchange-traded funds (ETF). The analysts consider the approval by the Securities and Exchange Commission a historic milestone to end the ten-year wait characterized by endless hurdles and rejections.
The analysts illustrate that though the Bitcoin ETF could open doors for other spot crypto exchange-traded products (ETPs), other cryptocurrencies could wait longer. In particular, the analysts indicate that while the Gary Gensler-led SEC will ultimately approve other crypto ETFs, investors eyeing spot XRP ETF should wait longer before Ripple-based ETP secures the regulator’s approval.
Ongoing Ripple Labs Case Hindrance to Spot XRP ETF
The analysts illustrate that Ripple Labs is embroiled in an endless legal tussle against the Commission. Also, they point to the absence of approved XRP futures ETF as a factor severely hurting the chances of the SEC approving spot XRP ETF approval.
The CoinShares product executive Townsend Lansing indicates that XRP ETF is unfeasible to anticipate unless the SEC either willingly concedes or is forced to agree that XRP is a commodity.
Lansing reflects on the July 2023 ruling by Judge Analisa Torres that XRP offered to the public through retail sales on exchanges is not a security. Nonetheless, the Southern District of New York Judge declared that XRP sold to the institutional buyers qualifies for security classification.
Lansing indicates that unless the legal fight ends between the two parties, approval of spot XRP ETF is unlikely in the foreseeable future. The CoinShares executive notes that the battle is ongoing, with the trial date set for April 2023.
Scott Johnson, who serves in the general partner role at Van Buren Capital, considers the possibility of the SEC approving the spot XRP ETF very slim. He indicates that the approval would likely occur under new leadership and not during the reign of Gary Gensler.
Remote Possibility for Spot XRP ETF Approval
CoinShares analyst Max Shannon echoes the sentiments foreseeing delayed approval of spot XRP ETF. The research analyst illustrates that the US took over a decade to realize the spot Bitcoin ETF.
The pessimistic view of the CoinShares team echoes the pronouncement by Bloomberg ETF lead analyst James Seyffart, who expressed little confidence in EXR ETF attaining imminent approval.
Seyffart revealed in a January 11 interview hosted by Thinking Crypto’s Tony Edward that subsequent crypto ETFs were riding on a remote possibility of realization. He expressed skepticism about the possibility of securing approval this year, considering the present case against Ripple.
Seyffart added that, unlike Ethereum and Bitcoin, XRP lacks futures ETFs approved within the United States.
Van Buren Capital’s Johnson weighs on the subject, arguing that the Commission would necessitate years of high futures and spot markets correlation even if financial exchanges such as the CME listed the XRP futures.
SEC would likely replicate the procedures deployed before approving the spot Bitcoin funds. Such is necessary to ascertain that existing surveillance-sharing agreements have sufficient sufficiency to help detect manipulation and fraud in the spot market.
Avid XRP Investors Hopeful for Spot ETF Approval
The pessimism exhibited by the analysts is not stymying the hope that avid XRP fans have for ETP approval.
A review of recent activity reveals playful evasive conduct by Ripple Labs chief executive Brad Garlinghouse when pressed in an interview in the just concluded World Economic Forum (WEF) hosted in Davos, Switzerland.
BlackRock chief Larry Film had portrayed similar conduct days earlier to dismiss a similar inquiry by Charles Gasparino, who hosts Fox Business. The anticipation of spot XRP ETF faded when Gasparino indicated that BlackRock harbors no plans for its pursuit.
The crypto asset executive at Franklin Templeton, Sandy Kaul, revealed in a January 11 interview that it plans to provide additional opportunities for crypto-related investments. The executive added that she anticipates the firm undertaking more filings, thereby raising hopes of approving crypto ETF filings.
While the analysts contend that the XRP fund is doubtful in the foreseeable future, the industry is yearning for potential approval of spot Ether ETFs. However, Bloomberg ETF lead analyst Eric Balchunas rated the approval odds at 70% in May.
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