Will They Trigger a New Bull Run for Ripple in 2025?

Following Trump’s November victory, the crypto market saw a sharp surge, driven by expectations of a pro-crypto Republican agenda. XRP stood out, jumping 54.65% in a month to hit $2.31.

This impressive rally brought its market cap to $132.3 billion, with an eye-catching 270% quarterly growth, solidifying its rank as the fourth-largest cryptocurrency. Although XRP is down 4% today, trading at $4.25, the market remains optimistic about its long-term prospects, with trading volumes reaching new peaks

Spotlight on XRP ETFs

XRP’s rising momentum has shifted focus to the prospect of XRP ETF approvals. iTrustCapital, a leading crypto IRA platform, has emphasized the potential impact of these products on XRP’s adoption. With Bitcoin and Ethereum spot ETFs gaining approval earlier this year, attention has now turned to XRP, and several asset managers are lining up to launch their own XRP ETFs.

Bitwise led the charge by filing its S-1 application with the SEC on October 2, 2024. Other players, including Canary Capital, 21Shares, and WisdomTree, quickly followed suit, with WisdomTree submitting its application as recently as December 2. Grayscale Investments and Bitwise are also exploring ETF baskets featuring XRP, signaling growing interest in tokenized investment products.

Two Driving Factors of XRP ETFs

iTrustCapital outlined the benefits of XRP ETFs, majorly focussing on two possible scenarios; accessibility and oversight. These products would allow investors to access XRP through traditional brokerage accounts while operating under-regulated financial markets, offering greater investor protection. Not only that XRP ETFs will be regulated assets with minimum risk involved. 

Potential Challenges

Despite their benefits, ETFs are not without challenges. They operate within limited trading hours, involve indirect ownership of XRP, and are susceptible to tracking errors and high fees. These drawbacks may dissuade investors seeking more direct and cost-effective ways to hold XRP.

Crypto Impact

Approval of XRP ETFs could significantly impact the token’s demand and supply. Institutional investors would need to accumulate large amounts of XRP to back these funds, creating buying pressure and potentially driving up prices.

Additionally, the introduction of XRP ETFs could increase market visibility and institutional adoption, establishing XRP as a bridge between traditional finance and the crypto world. This recognition may attract new waves of investment into the token.

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When Could XRP ETFs Go Live?

It is not clear when it will be officially launched, but speculation suggests XRP ETFs could hit in 2025 under a potentially crypto-friendly SEC leadership. With pro-crypto advocate Paul Atkins as SEC Chair, the market is bullish for an early approval once Trump takes charge. 

Like Bitcoin ETFs have given a good start to down crypto market this year, XRP ETFs are also expected to follow the lead, with Solana ETF also in the race it will be interesting to see who gets the first mover advantage next year after Bitcoin.