Expert Says XRP ETF Will Drive Investment and Utility, Shooting XRP Price

A prominent XRP community member has outlined a dual-pronged approach an XRP exchange-traded fund (ETF) could employ to propel XRP to unparalleled price levels.

On X, game designer Chad Steingraber recently expressed his views regarding the two-fold strategy an XRP spot ETF could offer to stimulate price appreciation for XRP.

According to him, the two prongs to a significant price increase via ETF would be through both investment and utility factors.

The Investment Side

Steingraber’s recent commentary builds upon an earlier post where he elaborated on how the creation of ETFs for XRP could lead to price increases.

He outlined a scenario wherein the ETF fund acquires XRP from public exchanges, locks up the XRP, and subsequently sells derivative shares to investors.

According to him, this process will diminish the available supply of XRP in the market, amplifying demand and propelling the value of XRP upward.

Furthermore, Steingraber noted that a vast majority of global investors would funnel their investments through such an XRP ETF. He suggested that these investors are long-term holders with a decade-long perspective.

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The Utility Side

The follow-up commentary introduces the idea of the utility aspect of XRP in the context of ETF. It suggested that aside from being viewed as an investment vehicle, there could be utility value.

There are two prongs to this⬇️

Investment // Utility

The utility side will be the same as an ETF, except the #XRP in this utility case will be collected into a Institutional Liquidity HUB and will be actively used. https://t.co/Q98DYoExwj

— Chad Steingraber (@ChadSteingraber) February 9, 2024

Specifically, Steingraber proposed that the utility aspect would mirror that of traditional finance’s exchange-traded fund. However, he noted there would be a distinction. 

In particular, Steingraber argued that XRP in this utility scenario would be aggregated into an “Institutional Liquidity Hub” for further use.

Essentially, this scenario implies that the XRP held by the ETF is not simply locked up but actively used within an institutional liquidity hub. This hub could facilitate transactions, payments, or other XRP applications.

Banking on these views, Steingraber argued that the price of XRP has no alternative direction but upward.

However, it is worth noting that both scenarios are hypothetical and hinge on the prospect of an XRP ETF, which, as of the time of reporting, no prominent firm has taken steps to establish. This is despite XRP’s favorable regulatory standing in the U.S.