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Some crypto market analysts have weighed in on what must happen before the Securities and Exchange Commission (SEC) can approve a Spot XRP ETF. Calls for this kind of investment fund have become louder since the Commission approved the Spot Bitcoin ETFs.

An XRP ETF Isn’t Feasible Until This Happens Sharing his opinion with Cointelegraph, CoinShares’ head of product, Townsend Lansing has mentioned that an XRP ETF was unlikely until the SEC agreed that XRP wasn’t a security. Van Buren Capital general partner Scott Johnsson also told the media outlet that the likelihood of the Commission approving this kind of fund was “very slim.” 

In his opinion, Gary Gensler will need to be replaced before the SEC can approve an XRP ETF. CoinShares research analyst Max Shannon also thinks that it could take a long time before an XRP ETF is introduced, considering how long it took for Spot Bitcoin ETFs to be approved. 

Bloomberg analyst James Seyffart also recently commented on whether an XRP ETF could launch soon. Then, he stated that he didn’t see this happening this year. He further highlighted the SEC’s case against Ripple as one of the reasons for his position. He believes that an XRP ETF can only come when the case is done. 

Seyffart also mentioned last year that XRP needs to be listed on the Chicago Mercantile Exchange (CME) before the SEC can approve a Spot XRP ETF. While reiterating this point in his most recent comment, he hinted that an XRP futures ETF could be an added advantage. 

Token price starts moving up | Source: XRPUSD On Why The SEC’s Opinion Might Not Matter Lansing mentioned that the SEC would need to agree that XRP wasn’t a security before it could approve an XRP ETF. However, considering that the court already ruled that the crypto token isn’t a security in itself, what the Commission really thinks might not matter. As such, the regulator would be cautious about using this as a reason to deny any application. 

Meanwhile, although the SEC’s case against Ripple is still in court, the Commission understands that this cannot be used as a determinant in determining whether it would approve an XRP ETF. This is because Grayscale has set a precedent whereby the Commission can be dragged to court if it decides to act ‘arbitrarily and capriciously.’

Bloomberg analyst James Seyffart, however, makes a fair point. The SEC can easily argue that its reason for denying an XRP ETF is because of potential price manipulation. That is where XRP trading on a regulated market like the CME comes in, as the exchange can be included in any surveillance-sharing agreement.

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Scott Matherson Scott Matherson is a leading crypto writer at Bitcoinist, who possesses a sharp analytical mind and a deep understanding of the digital currency landscape. Scott has earned a reputation for delivering thought-provoking and well-researched articles that resonate with both newcomers and seasoned crypto enthusiasts. Outside of his writing, Scott is passionate about promoting crypto literacy and often works to educate the public on the potential of blockchain.

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May 2024


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