Following the launch of spot Bitcoin and Ether ETFs in the United States, attention is now shifting to the potential debut of XRP and Solana exchange-traded funds (ETFs), which could have a significant impact on the cryptocurrency market.
XRP ETF Development Gaining Momentum
During a recent panel at Ripple Swell 2024, Tim McCourt, senior managing director at CME Group, discussed the growing interest in an XRP ETF. According to McCourt, the groundwork for such a product is already being laid. He noted that CME Group has introduced an XRP reference rate and a real-time index, marking a key step toward building an ecosystem that supports an XRP ETF.
“We do have an XRP reference rate and a real-time index, which is a first step in building out this ecosystem,” McCourt said. These benchmarks, used by financial firms such as Bitwise, provide regulated and transparent pricing data, essential for creating ETF products.
McCourt’s remarks came shortly after the Securities and Exchange Commission (SEC) received its second application for an XRP ETF. Canary Capital followed Bitwise Asset Management in submitting their request to launch an XRP-based fund.
ETFs Driving Crypto Industry Growth
The launch of the first spot Bitcoin ETFs in the U.S. has been a pivotal moment for the cryptocurrency market, helping to increase institutional interest and legitimacy for the sector. McCourt emphasized that ETFs are playing a crucial role in accelerating the industry’s growth, particularly by driving new investment into digital assets.
“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,” McCourt explained. “This ecosystem is really accelerating.”
Spot Bitcoin ETFs have already proven their potential to boost cryptocurrency prices. For instance, by mid-February, 75% of new Bitcoin investments were funneled through spot ETFs, contributing to the cryptocurrency’s surge past the $50,000 mark.
XRP’s Struggles Despite Growing ETF Interest
Despite growing enthusiasm for an XRP ETF, the cryptocurrency has faced challenges in gaining momentum. Over the past year, XRP’s price has risen by just over 8%, lagging behind Bitcoin, which surged more than 154% in the same period. However, the introduction of an XRP ETF could potentially offer the token a significant price boost, much like what has been observed with Bitcoin.
The approval of an XRP ETF would mark a significant milestone for both the cryptocurrency and the broader market, potentially increasing liquidity and investor confidence in XRP.
