- Several XRP ETF applicants are hopeful to get an SEC nod.
- Kaiko Research says these applications have a lot going for them.
- JPMorgan expects these funds to attract $8 billion in investor flows.
The Ripple-linked cryptocurrency XRP is the most likely altcoin to get spot exchange-traded funds approved by the US securities regulator.
That’s according to a new note from Kaiko Research that suggests that several tailwinds are making a Securities and Exchange Commission nod more likely, such as growing US trading volumes, and the launch of a leveraged XRP ETF, which has the ticker XXRP.
“This underlying markets improving dynamics and the launch of the [XXRP ETF] last week position XRP ahead of other assets when it comes to approval,” Kaiko wrote.
The note comes as JPMorgan predicts that XRP ETFs could attract $8 billion in investor flows within the first year.
A wave of applications
A wave of applications to launch altcoin ETFs has flooded the SEC this year, fuelled by the Trump administration’s pro-crypto sentiment.
Last week, known crypto-backer Paul Atkins was confirmed to lead the SEC as its new chair.
“While crypto is just a tiny fraction of market activity in the US, pressing deadlines might push it to the forefront for the new chair,” Kaiko wrote.
In February, investment firm Grayscale applied to launch a US spot XRP ETF. The SEC is expected to respond to the application by May 21, but the final ruling may take until mid-October.
A spot ETF is a fund that holds the actual underlying asset — such as a cryptocurrency — rather than derivatives or futures contracts. It allows investors to gain exposure to the real-time market price of the cryptocurrency without having to buy or store it directly.
XRP vs. Solana
XRP and Solana seem to be the two frontrunners in the altcoin spot ETF race.
Polymarket punters put the chances of an XRP ETF and a Solana ETF getting approved this year at 78% and 82%, respectively.
Still, Kaiko suggests that XRP-linked applications have many things going for them.
Kaiko’s data suggests that XRP and Solana have the highest 1% market depth among all altcoins. The measure indicates how big an order has to be to move the price of the asset. The more valuable an asset is, the bigger the order needed.
The SEC under former chair Gary Gensler prioritised assets that had highly-liquid markets, usually by gauging the futures market of the asset.
While the CME Group launched a Solana futures market in March, XRP doesn’t have one.
However, in recent months XRP’s share of spot volume on US exchanges has climbed to about 20%. That’s its highest level since before the SEC filed its 2021 lawsuit against Ripple, Kaiko noted.
Ripple uses XRP to facilitate cross-border transactions. The SEC dropped its case against Ripple in March.
Solana has lost ground, having fallen from about 25% in 2022 to 16%.
XXRP
Last week, Vermont-based investment firm Teucrium launched a leveraged XRP ETF, which offers double daily returns on the cryptocurrency. So far, it has accumulated $17 million net assets under management.
Kaiko suggests it could also serve as a boon for the chances of a spot XRP ETF.
“Since this leveraged ETF relies on returns from European ETPs and swap agreements to guarantee twice the daily returns of XRP, it’s hard to see how a spot product is more risky and therefore diminishes most arguments for denying these applications,” Kaiko wrote.
To be sure, Kaiko notes that options traders are bearish about XRP in the short-term. On crypto derivatives exchange Deribit, traders are betting that the cryptocurrency won’t trade above $2 in April and May.
“This is likely linked to broader market uncertainty at present due to macroeconomic concerns,” Kaiko wrote.
The researchers also noted that Litcoin, which have similar consensus mechanisms to Bitcoin and “share similarities to commodities could also have a clear path to approval.”
Crypto market movers
- Bitcoin gained 0.9% over the last 24 hours, trading at $85,514 as of press time.
- Ethereum was down 3.2% to trade at $1,629.
What we’re reading
- XRP price spikes 30% after outflow. Here’s where traders see the price going next — DL News
- TradeTraitor: The Kings of the Crypto Heist — Wired
- 90-day pause on tariffs! — Milk Road
- U.S. Treasuries Are Ailing Due to Tariffs, but Tokenized Treasuries? Growing — Unchained
- Binance Seeks to Curb U.S. Oversight While in Deal Talks With Trump’s Crypto Company — Washington Post
- Ethereum is faster and cheaper than ever to use. Why aren’t investors excited? — DL News
Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.
