The U.S. Securities and Exchange Commission (SEC) has begun reviewing Grayscale’s proposal for an exchange-traded fund (ETF) tied to XRP.
If approved, this ETF would provide institutional investors with a regulated avenue for gaining exposure to XRP, potentially increasing liquidity and mainstream adoption.
cryptocurrency exchange Uphold highlighted the development in a recent post on X, noting that Bloomberg analysts estimate a 60% chance of approval, though a final decision could take up to 240 days.
With the SEC now reviewing Grayscale’s $XRP ETF proposal, institutional investors could have a regulated way to gain exposure.
Bloomberg puts approval odds at 60%, but a decision could take up to 240 days.
Will the #XRP ETF get the green light, or will the SEC drag this out?
— Uphold (@UpholdInc) February 17, 2025
The Potential Impact of an XRP ETF
The introduction of an XRP ETF would be a significant milestone for the digital asset industry, following the approval of spot Bitcoin ETFs in early 2024.
Institutional investors who may hesitate to purchase XRP directly due to regulatory uncertainties could find an ETF a more attractive and compliant investment option. This ETF could also contribute to greater price stability and long-term investor confidence.
Grayscale’s move aligns with the broader trend of asset managers seeking to introduce cryptocurrency-based ETFs to bridge the gap between traditional finance and digital assets. Uphold’s discussion of the topic reflects the increasing interest from market participants who are eager to see more institutional-friendly financial products centered around XRP.
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Regulatory Hurdles and Considerations
Despite the positive outlook from Bloomberg analysts, regulatory uncertainties remain a key challenge. The SEC has historically been cautious in approving cryptocurrency ETFs, often citing investor protection concerns.
The situation with XRP is further complicated by the SEC’s ongoing lawsuit against Ripple Labs, in which the agency initially alleged that XRP was an unregistered security. While parts of the case have been resolved in Ripple’s favor, unresolved legal matters could still impact the SEC’s decision-making process regarding an ETF.
Some market observers speculate that the SEC would need to drop the remaining aspects of the case before approving an XRP ETF.
One X user pointed out that 240 days would be enough time to resolve the lawsuit and approve multiple ETF applications. Others questioned why the approval process should take so long, with one commenter noting that the delay seemed excessive.
Another user expressed confusion over whether the reluctance to approve an XRP ETF was due to SEC Chair Gary Gensler’s stance on the asset or if the entire agency shared his viewpoint.
These reactions reflect broader frustration within the cryptocurrency community regarding the SEC’s approach to digital asset regulation. Many believe that the agency’s prolonged review processes create unnecessary uncertainty and hinder market growth.
Outlook for Approval
While Bloomberg’s 60% approval odds suggest a reasonable chance of success, the lengthy review period introduces unpredictability. The SEC has historically been slow to approve crypto-related financial products, and its handling of the XRP case has only added to concerns about regulatory consistency. However, the recent wave of ETF approvals, and the legal precedents set by the Ripple case, could influence the final decision.
If the XRP ETF is approved, it could boost market confidence and drive institutional investment in XRP. On the other hand, a rejection could reinforce concerns about the SEC’s regulatory stance on cryptocurrencies.
The coming months will be critical in determining whether the SEC is prepared to allow further expansion of crypto ETFs or if it will maintain its cautious approach.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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