Summary
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Legal Clarity Paves the Way for XRP ETF: The resolution of Ripple’s lengthy lawsuit with the SEC is considered a game-changer, removing the primary regulatory obstacle that previously hindered the possibility of an XRP exchange-traded fund in the US.
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Analyst Predicts Influx of XRP ETF Applications: With the legal uncertainties now largely resolved, ETF expert Nate Geraci anticipates that major financial institutions, including industry giants like BlackRock and Fidelity, are likely to pursue applications for XRP-backed investment products.
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XRP’s Market Size and Recent Price Surge Underpin ETF Optimism: XRP’s significant market capitalization, coupled with a recent price increase fueled by ETF speculation and legal developments, strengthens the argument for its attractiveness as an underlying asset for a new ETF offering.
An analyst suggests that Ripple’s recent legal successes have fundamentally altered the landscape, making this prospect a real possibility.
The settlement of Ripple’s four-year legal confrontation with the Securities and Exchange Commission (SEC) is considered by many to have dismantled the primary regulatory obstacle that previously stood in the way of XRP ETF approval within the United States.
After a protracted and arduous four-year battle between Ripple Labs and the SEC, observers are now indicating that the pathway for an XRP ETF to be launched in the U.S. is finally unobstructed.
Ripple’s Legal Victory: Clearing the Path for an XRP ETF
Nate Geraci, a respected authority on exchange-traded funds, has expressed a bullish perspective regarding the prospects for XRP ETFs.
According to Geraci, the resolution of the previous legal ambiguities means that significant financial players, including asset management giants like BlackRock and Fidelity, are now likely to pursue applications for investment instruments that track the performance of Ripple’s XRP token.
In a social media post on X, dated March 26th, the president of ETF Store conveyed his conviction, stating, “In my view, the approval of a spot XRP ETF appears to be inevitable.
Moreover, I fully expect to see major firms like BlackRock and Fidelity actively entering this space.”
Furthermore, Geraci underscored XRP’s substantial market capitalization, positioning it as one of the leading cryptocurrencies with a valuation exceeding $144 billion.
He reasons that this significant market presence will make it highly unlikely for the nation’s largest ETF issuers to overlook the asset’s inherent investment opportunities.
Despite the SEC’s historically conservative stance on approving ETFs linked to alternative cryptocurrencies (altcoins), Geraci anticipates that the regulatory agency will eventually acquiesce.
He also drew attention to the evolving discussion within the investment sector regarding the future prominence of broadly diversified cryptocurrency index ETFs versus more narrowly focused single-asset ETFs.
Although generally optimistic about the continued growth of cryptocurrency-based investment products, Geraci suggests that regulators are likely to establish definitive boundaries regarding the types of offerings that will receive regulatory clearance.
The protracted legal entanglement between Ripple and the SEC has long been identified as a primary barrier hindering the approval of an XRP ETF.
This dispute originated in 2020 when the SEC charged the cryptocurrency payment firm with executing unauthorized and unregistered sales of securities through the XRP token.
From Legal Battles to ETF Speculation
In a notable triumph for the crypto space in 2023, Judge Analisa Torres delivered a ruling stating that Ripple’s programmatic sales of XRP did not contravene securities regulations.
Conversely, the judge found that institutional sales of the same digital asset did indeed violate the law, resulting in a financial penalty of $125 million imposed on Ripple.
Following this judgment, the SEC initiated an appeal, which was met by a retaliatory cross-appeal from Ripple, thereby extending the duration of the legal proceedings.
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