XRP Could Have Its Own ETF by 2025

Sentiment status: Positive

Next year may bring a "wave of cryptocurrency ETFs" according to Eric Balchunas.

The chances of XRP securing an ETF approval in 2025 are increasing. Source: Grok.

In 2025, several cryptocurrencies may have their own spot ETFs in the United States, including XRP, the cryptocurrency issued by Ripple.

Eric Balchunas, an ETF expert at Bloomberg Intelligence, predicts a "wave of cryptocurrency ETFs" next year but cautions that "not all will be approved at once". This development is expected to follow significant changes in cryptocurrency regulation.

With Gary Gensler stepping down as Chair of the Securities and Exchange Commission (SEC) in January and the anticipated appointment of Paul Atkins, nominated by President-elect Donald Trump, a more crypto-friendly regulatory environment is on the horizon.

Atkins, known for his support of the crypto asset industry, is expected to ease the path for these financial products, Balchunas noted. This regulatory shift aligns with Trump’s promises to reduce restrictions on the cryptocurrency sector.

So far, companies like WisdomTree, Bitwise, 21Shares, and Canary Funds have submitted applications to launch XRP ETFs.

Litecoin and Hedera ETFs Could Be Next

The U.S. market has already approved spot ETFs for Bitcoin and Ether (ETH), Ethereum’s native cryptocurrency. The next likely approvals are dual Bitcoin and Ether ETFs. Proposals from Hashdex, Franklin Templeton, and Bitwise aim to combine these two crypto assets, according to Eric Balchunas.

Balchunas also highlights that ETFs based on Litecoin (LTC) and Hedera (HBAR) have strong chances of approval. Canary Capital is spearheading the proposal related to HBAR. However, the expert notes that these approvals might not happen simultaneously.

ETFs Boost Cryptocurrency Prices

Spot ETFs have a direct impact on the valuation of their underlying cryptocurrencies. Asset management firms offering these financial instruments are required to purchase and hold the digital assets in their treasuries to back the issued shares. When demand for these products rises, these firms must buy more cryptocurrencies in the market.

This activity increases demand for the crypto assets, naturally driving their prices higher due to the basic principles of supply and demand. Furthermore, the involvement of major banks and institutional investors in these ETFs signals a growing institutional interest in cryptocurrencies. The influx of institutional capital not only injects substantial funding into the market but also bolsters confidence in cryptocurrencies as a legitimate and valuable asset class.

The approval of ETFs for XRP and other cryptocurrencies could be a pivotal moment for the industry. With more flexible regulations and the engagement of institutional players, the cryptocurrency market could undergo transformative changes in the years to come.