Ripple Labs CEO Brad Garlinghouse remains confident that an exchange-traded fund (ETF) for XRP/USD is “just inevitable” despite ongoing regulatory challenges.
As institutional demand for cryptocurrency surges, Garlinghouse emphasized the importance of crypto ETFs, pointing to the explosive growth seen in Bitcoin ETFs since their approval.
However, XRP's path to an ETF approval is far from clear, clouded by legal battles and regulatory uncertainty.
"Since funds holding Bitcoin were first approved in January, $17 billion has flowed into the fastest-growing ETF in history," Garlinghouse noted in an interview with Bloomberg.
This inflow, he explained, showcases the growing appetite from both retail and institutional investors for easier access to digital assets.
Legal Challenges Loom Large For XRP
While Bitcoin BTC/USD inches closer to new highs, XRP’s trajectory is more uncertain, largely due to its ongoing legal dispute with the U.S. Securities and Exchange Commission (SEC).
Ripple has been embroiled in a multi-year legal battle with the SEC, which claims the company illegally sold XRP as an unregistered security.
Although Ripple secured a partial court victory in 2023, with a ruling that programmatic sales of XRP to retail investors did not violate securities laws, the SEC has appealed, and the outcome remains unresolved.
Speaking with Benzinga, Ryan Lee, Chief Analyst at Bitget Research, highlighted the importance of the SEC appeal in shaping XRP's future.
“The SEC’s appeal has attracted significant market attention, raising concerns about its potential effects on XRP’s price and overall sentiment,” Lee said.
If the appeal results in a negative outcome for Ripple, it could lead to a steep decline in XRP's price.
However, Lee added, “A favorable ruling or positive investor sentiment around Ripple's case could stabilize XRP’s position or even lead to a price increase.”
XRP’s regulatory uncertainty also casts doubt over the possibility of launching an ETF based on the asset.
Bitwise Asset Management recently filed paperwork for an XRP ETF, sparking debate over whether the SEC will approve such a product amid the ongoing legal proceedings.
Nate Geraci, President of the ETF Store, called Bitwise's move “strategic,” but acknowledged the legal complexities.
Also Read: There Has Never Been A More Pro-Crypto Congress Than The Next One: Here’s Why
Market Sentiment Boosts Hope for XRP ETF
Despite these challenges, Garlinghouse believes XRP's inclusion in the ETF market is only a matter of time.
The filing by Bitwise Asset Management shows optimism for XRP's future, even as it faces legal and regulatory hurdles.
Experts have noted that the outcome of the SEC's appeal, combined with the upcoming U.S. presidential election, could significantly impact XRP's chances for an ETF approval.
Alex Thorn, Head of Research at Galaxy Research, said that the SEC's actions in the coming weeks will be pivotal.
"The SEC has until October to appeal Judge Torres’ ruling, and if they proceed, the likelihood of the XRP ETF's approval will drop significantly," Thorn warned.
Adding to the complexity, political factors could also play a role in determining XRP's future.
Bloomberg's Senior ETF Analyst Eric Balchunas suggested that a potential change in U.S. leadership could alter the regulatory landscape.
“A Trump win could shift the balance, making ETF approvals more likely, while a Harris victory may hinder such progress,” Balchunas said.
A Market On The Brink Of Change
Ripple's ongoing legal fight has broader implications for the cryptocurrency industry as a whole. Analysts agree that clearer regulatory frameworks could benefit not only XRP but also Bitcoin and other digital assets.
As Bitcoin approaches new highs and inflows into crypto ETFs soar, the upcoming U.S. election is expected to bring greater regulatory clarity.
Pedro Lapenta, Head of Research at Hashdex, pointed out that both major presidential candidates are more open to the crypto sector, which could shape future regulations in a way that benefits both XRP and Bitcoin.
These developments in the crypto space, along with the potential approval of an XRP ETF, will be a focal point at Benzinga's Future of Digital Assets event on Nov. 19, where industry leaders will discuss how legal, regulatory, and political factors are shaping the future of cryptocurrency and digital asset investments.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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