XRP ETFs Gain Momentum Amid Regulatory Shift

Analysts predict favorable odds for XRP ETFs amid evolving regulatory landscape, with potential approvals on the horizon.

The recent presidential election in the U.S. has sparked optimism in the cryptocurrency market, particularly for exchange-traded products (ETPs) linked to various cryptocurrencies. Bloomberg analysts James Seyffart and Eric Balchunas have estimated the odds of approval for these funds, indicating that Litecoin ETFs, primarily from Canary Capital and Grayscale, present the strongest case with a 90% approval probability. Following closely are products associated with Dogecoin, rated at 75%, while Solana and XRP trail with estimates of 70% and 65%, respectively.

Significant developments in the regulatory landscape, particularly under the current U.S. administration, have contributed to this favorable outlook. With a more pro-crypto stance emerging, analysts are encouraged about the removal of regulatory hurdles that have previously hindered the advancement of digital assets. The recent actions taken by issuers to secure approvals for cryptocurrency ETFs other than Bitcoin and Ethereum are a testament to this shift.

Since the election of Donald Trump, there has been a noticeable pivot in how government entities view cryptocurrencies. This newfound support resonates in the market, as highlighted by Balchunas, who stated, "Keep in mind all of this stuff... was 5% prior to election." Such a change implies that we could expect a wave of new applications for ETFs as well as the possibility of faster approvals as regulatory clarity is pursued.

The establishment of a new crypto task force led by Republican Commissioner Hester Peirce aims to create a clear regulatory framework for the digital asset ecosystem. This initiative will enhance the SEC's regulatory approach, with further advances expected as the clarity surrounding various cryptocurrencies evolves. Seyffart's assertion that "the SEC will untangle some of the security vs. commodity implications" by the end of 2025 speaks to a critical future for regulatory practices and the cryptocurrency market.

Recently, the Cboe BZX Exchange filed 19b-4s for various funds from Bitwise, 21Shares, and Canary, targeting the listing and trading of spot products tracking XRP among others. However, litigation involving Ripple and the SEC poses a significant barrier.