The price of XRP has been struggling to rise since Bitwise filed for an XRP exchange-traded fund (ETF) in October. It was down nearly 20% from $0.66 at the end of last month to $0.53.

SEC’s Objection to Ripple

The negative price performance is due to the negative impact of the legal action taken by the US Securities and Exchange Commission (SEC) against Ripple. The SEC’s objection to Ripple reduces the likelihood of XRP’s ETF approval.

Kaiko: SEC Stance Makes ETF Approval Harder

Kaiko analysts noted that the SEC’s ongoing legal battle with Ripple and concerns about market manipulation make XRP ETF approval difficult. “The chances of Grayscale moving from private placements to an XRP ETF are very low. The SEC’s main concern is market manipulation,” the analysis said.

Grayscale recently introduced an XRP trust, which is set to eventually be turned into an ETF, but Kaiko said the likelihood of this is low.

The Role of the Futures Market

Analysts say there is no consensus on whether the lack of a futures market for XRP limits the chances of ETF approval. Some argue that a futures market is not necessary for ETF approval, while others think it is beneficial. Pro-crypto SEC member Hester Peirce noted that a spot ETF is possible without futures.

Peirce said that a spot ETF approval could be possible without a futures market, but that would make it more similar to products created for cryptocurrencies like Bitcoin and Ethereum.

It remains to be seen what Bitwise and Grayscale will do in the future, as the SEC will evaluate each product on its own “facts and circumstances.”

In Grayscale’s successful SEC lawsuit, the approval of the Bitcoin spot ETF was done after the futures fund was established, but this may not be the case for XRP due to different market conditions.

Regulation of the ETF market and the SEC’s stance play a significant role in the emergence of crypto assets like XRP as financial products. For investors, these developments continue to create uncertainty about the future of the market.

The SEC’s legal battle over XRP and Ripple continues to have significant impacts on the cryptocurrency market. XRP investors are closely following the SEC’s stance on ETF approval. Future developments could determine the adoption of crypto assets as financial instruments.

  • The price of XRP is falling due to the SEC's objection against Ripple.

  • SEC concerns remain a hurdle for ETF approval.

  • The impact of the futures market on ETF approval is under debate.