XRP price showed new signs of life on Monday as the cryptocurrency surged more than 27% from its intraday low, breaking through numerous resistance levels and setting a new yearly high above $0.745. This price rise has not only captured the attention of investors, but also sparked discussion about the future of the asset, particularly the possible launch of exchange-traded funds (ETFs).
Martin Hiesboeck, Head of Research at Uphold Exchange, was particularly vocal about ecosystem development. Looking back on the asset’s recent performance, Hiesboeck cited the regulatory clarity achieved over the past year, giving positive momentum to “increased development for XRP since the lawsuit was resolved.”
He hinted at the proximity of an ETF, saying, “Since the lawsuit was resolved, we are finally seeing the fruits of increased XRP development.” XRP ETP will also be released soon. The old girl has life.”
We are finally seeing the fruits of our progress. $XRP Because the lawsuit has been settled! XRP ETP will also be released soon. The old girl has life.
— Dr. Martin Heathboeck (@MHiesboeck) March 12, 2024
The bumpy road to an XRP ETF in the US
Expectations for ETFs stem from the broader expansion of the ecosystem. Developments such as the soon-to-be-enabled Automated Market Maker (AMM) for the XRP Ledger (XRPL) and an Ethereum-compatible sidechain currently being tested.
Despite these expectations, the path to ETFs in the U.S. remains speculative, and major asset managers such as BlackRock are taking a cautious stance. However, optimism in the industry is palpable, with figures such as Ripple CEO Brad Garlinghouse and Valkyrie’s Steve McClurg expressing confidence in the inevitability of ETFs.
In an interview three weeks ago, Garlinghouse welcomed the ETF idea and suggested that the evolution of cryptocurrency ETFs follows a natural progression toward diversification and maturity in the investment landscape. “I think it makes sense,” he said, drawing parallels with the early days of the stock market when diversification was not just a strategy but a necessity for managing investment risk.
“There will be other ETFs. (…) So we will see different ETFs. It’s hard to predict when we’ll see it,” Garlinghouse added. Echoing Garlinghouse’s optimism, Valkyrie executive Steve McClurg said in a January interview: “I think we’re going to see a lot of papers coming out on Ethereum. Looking at recent developments, I think we may be seeing something for Ripple.”
Surprisingly, experts including Bloomberg’s Eric Balchunas have lowered their odds of a spot Ethereum ETF to 35% due to recent events. The XRP ETF appears to have potential only if the largest altcoins by market capitalization make way.
Internationally, the scenario appears to be more favorable for asset-based investment vehicles, such as exchange-traded products (ETPs) already listed on the Swedish Stock Exchange and the 21Shares Ripple XRP ETP in Europe, which tracks the performance of cryptocurrencies.
At press time, XRP was trading at $0.68775.
Featured image from Shutterstock, chart from TradingView.com