Amid growing expectations about the possible arrival of a Ripple (XRP) Exchange-Traded Fund (ETF) in the United States during 2024, Bloomberg Intelligence analyst James Seyffart sheds light on the real possibilities of this event.
Seyffart suggests that the chances of an XRP ETF seeing the light of day in 2024 are slim, and bases his analysis on three essential reasons.
The first and most prominent reason is the ongoing legal battle between Ripple and the United States Securities and Exchange Commission (SEC).
The resulting uncertainty over XRP’s regulatory status creates an unfavorable environment for the approval of a Ripple ETF in the near term.
Seyffart points out as a second point of his foundation, the absence of an established regulatory framework for XRP compared to Bitcoin and Ethereum.
While the latter have futures ETFs on regulated markets such as the Chicago Mercantile Exchange (CME), Ripple lacks a similar infrastructure, complicating the path to approval of an exchange-traded fund.
The analyst highlights that the existence of futures ETFs for Bitcoin and Ethereum has paved the way for the approval of exchange-traded funds.
However, this favorable scenario does not apply to Ripple, as it does not have a solid regulatory foundation in the current market.
Finally, as a third negative point about the idea, Seyffart highlights that the existence of futures operations for Bitcoin and Ethereum, along with their respective ETFs, has established a precedent that facilitates the approval of exchange-traded funds.
Ripple, however, does not benefit from a similar supportive environment.
The absence of regulated futures trading for XRP on platforms like CME and the lack of ETFs for the cryptocurrency hamper the approval process.
Seyffart estimates that 2025 seems a more realistic target for the launch of an XRP ETF
This deadline is based on the assumption that by then the regulatory environment will have improved, offering more conducive conditions for approval.
In parallel, the SEC has recently approved several applications for Bitcoin (BTC) ETFs, generating notable volatility in the price of this cryptocurrency.
This approval contrasts with the uncertainty surrounding Ripple and underlines the current complexity of the cryptocurrency market.
The analysis highlights a critical moment in the legal dispute between Ripple and the United States Securities and Exchange Commission (SEC), commenting on its expectations that it will reach its final point with a major trial scheduled for April 23, 2024.
This implies that the parties involved will present their final arguments and fundamental decisions will be made in this judicial process.
The outcome of this trial carries significant weight, as it could have a substantial impact on the future of Ripple and, by extension, the overall perception and regulation of the cryptocurrency industry.
The decisions made in this court event could influence investor confidence and regulatory prospects for other cryptocurrencies, marking a crucial milestone in the development and acceptance of these assets in the financial system.
Ripple has secured some partial victories in the last year, and the outcome of the trial is highly anticipated by the global financial and economic market.