As a seasoned analyst with over two decades in the financial markets, I’ve witnessed the evolution of various asset classes and their transformation into mainstream investments. The recent debut of cryptocurrency-based ETFs in the United States is undeniably a significant milestone for the digital asset industry.
After the launch of the initial cryptocurrency-based Exchange Traded Funds (ETFs) in the U.S., investors are now looking forward to seeing what other digital asset trading products will emerge next.
Speaking on the topic of a potential Exchange Traded Fund (ETF) for XRP (XRP), Tim McCourt, a top executive at CME Group, expressed that a significant initial milestone has already been laid down.
During a panel discussion at Ripple Swell 2024, McCourt said:
“We do have an XRP reference rate and a real-time index, which is a first step in building out this ecosystem […] We have upwards of 50 real-time prices and reference rates. That’s key for product providers like Bitwise because they can at least point to a fully regulated benchmark.”
A week following Canary Capital’s submission of its second ETF application for XRP to the U.S. Securities and Exchange Commission, McCourt’s remarks were made, as reported by Bloomberg ETF analyst Eric Balchunas.
After Bitwise Asset Management, Canary became the second entity to submit an application for an XRP-based ETF.
ETFs speeding up crypto industry growth
The advent of the first spot Bitcoin (BTC) and Ether (ETH) ETFs has marked a turning point for the cryptocurrency industry, helping to legitimize the sector.
McCourt said the introduction of ETFs has significantly accelerated the growth of the industry:
“I don’t think it’s accidental that some of our largest open interest days and volume-based futures have happened after the advent of the ETFs because this ecosystem is really accelerating.”
Even though there’s much excitement about the possibility of an XRP ETF, the value of the token hasn’t managed to pick up speed, even as the broader cryptocurrency market experiences growth.
During the last twelve months, the value of XRP increased by approximately 8%, whereas Bitcoin’s price experienced a more substantial growth of around 154% as per the data provided by CryptoMoon.
As a crypto investor, I’ve personally observed that Exchange-Traded Funds (ETFs) can substantially boost the value of the underlying digital currency. For instance, when Bitcoin hit the $50,000 milestone by Feb. 15, approximately 75% of the new investments pouring into Bitcoin were from spot ETFs.
XRP or SOL ETF first?
Among crypto enthusiasts, there’s palpable enthusiasm about the prospect of a Solana (SOL) Spot ETF, as many believe it could serve as a powerful price driver for this digital currency.
On August 7, the first Exchange Traded Fund (ETF) based on Solana was given approval in Brazil, paving the way for similar moves in other international markets.
Although the approval of a U.S.-listed Solana ETF is still uncertain at this time, if it were to be approved, it could serve as a significant price catalyst for Solana, as suggested by Alejo Pinto, former IBM blockchain growth lead and founder of the Solana layer-2 network Lumio.
Pinto told CryptoMoon:
“Since it is still very uncertain, an ETF approval in the US would have a positive price impact on Solana since the probability is low and therefore not yet priced in.”
Experts like Manthan Dave, one of the founders of Palisade – a digital asset custody company supported by Ripple – foresee the possibility of a Solana Exchange-Traded Fund (ETF) being launched as early as the year 2024.
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2024-10-16 13:28