While Bitcoin exchange-traded fund (ETF) applications are still awaiting approval from the US Securities and Exchange Commission (SEC), executives from asset management firms are already speculating about the potential launch of spot ETFs for other major cryptocurrencies, including XRP and Ethereum (ETH).
Valkyrie Invest’s Chief Investment Officer, Steven McClurg, expressed his belief that the SEC’s potential approval of a Bitcoin ETF could pave the way for similar offerings in the XRP and Ethereum markets.
However, regulatory challenges and classifying XRP and Ethereum as securities may present hurdles toward these index funds.
XRP And Ethereum Spot ETF Potential Hurdles
Unlike Bitcoin, which has been classified as a commodity by regulators, XRP and Ethereum have been deemed securities. This divergence in classification poses potential difficulties and may necessitate a more complex approval process for spot ETFs tracking these cryptocurrencies.
The anticipated impact of spot ETF approval on the XRP and Ethereum price would mirror the pattern seen with Bitcoin. Still, the SEC’s skepticism towards the broader cryptocurrency market could pose additional hurdles for XRP and Ethereum ETFs.
Nevertheless, the outcome of the ongoing Ripple vs. SEC case holds significant implications and could hold the key for the cryptocurrency industry to pursue these index funds for other cryptocurrencies.
If Ripple, the blockchain payment company associated with XRP, emerges victorious and is not classified as a security by Judge Analisa Torres, it could establish a precedent for asset managers seeking to apply for an XRP ETF.
This legal precedent could also prompt potential litigation against the SEC to support an Ethereum ETF application.
While discussions revolve around the possibility of spot ETFs for XRP and Ethereum, there is still uncertainty surrounding the approval of Bitcoin ETFs.
The SEC may reject or delay the pending applications, making it uncertain whether these other index funds will materialize. Furthermore, US regulators’ current classification of XRP and Ethereum as securities adds an additional layer of complexity to their respective ETF prospects.
Bitcoin ETF Decision Imminent
As reported on Monday by NewsBTC, Sources close to the process have indicated that the ultimate approval for Bitcoin ETFs may come on Wednesday.
CNBC’s sources suggest that this coincides with the application deadline for Ark Invest and 21 Shares, raising the possibility of a potential trading launch between Thursday and Friday. Several applications are expected to receive the green light, pending updates from the SEC on the filings.
Overall, as anticipation builds around the potential approval of Bitcoin ETFs, asset managers are already contemplating the prospect of spot ETFs for other major cryptocurrencies like XRP and Ethereum.
However, the regulatory challenges and the classification of XRP and Ethereum as securities present significant hurdles for these index funds. The Ripple vs. SEC case outcome could have far-reaching implications, potentially setting a legal precedent for asset managers to pursue XRP and Ethereum ETFs.
XRP is trading at $0.5673, showing a lack of bullish momentum with a 1% decline in the past 24 hours. Furthermore, it has experienced a continuous downtrend of 13% over the past 30 days.
Featured image from Shutterstock, chart from TradingView.com