While the SEC’s uncertain stance on XRP ETFs persists, investors in the market are awaiting a new decision. The SEC has postponed applications from major asset management companies like Grayscale and Bitwise, extending the process until at least May. Franklin Templeton, however, submitted a new XRP ETF application, indicating ongoing institutional interest in the matter. Analysts suggest that the approval of XRP ETFs could lead to billions of dollars entering the market, but there is no clear forecast on how the process will unfold.

Approval of exchange-traded funds (ETFs) tracking the spot prices of Bitcoin and Ethereum took years. But significant changes at the U.S. Securities and Exchange Commission (SEC) are now paving the way for a similar process for ETFs focusing on smaller cryptocurrencies like XRP. The SEC announced the postponement of the decision regarding whether to allow Grayscale and Bitwise, major asset management firms, to launch exchange-traded funds based on XRP. This delay is seen as a significant development for XRP investors, signaling that the process will stretch at least until the end of May, ruling out the immediate launch of ETFs that allow investors to be exposed to XRP’s price indirectly.

This regulatory development, particularly capable of increasing institutional investor interest, has made waves in the market. The total net assets of Bitcoin and Ethereum ETFs have reached $99 billion. A similar path for XRP ETFs could boost interest in this altcoin. However, the uncertainty remains about how much longer the process will take.

LIKELIHOOD OF XRP ETF APPROVAL

One of the biggest concerns for XRP investors is whether the SEC will keep delaying these applications indefinitely. According to data from the crypto-powered prediction market Polymarket, there is a 35% chance that XRP ETFs will be approved by July 31. However, this probability is estimated to rise to 72% by the end of the year.

Despite changes at the SEC with Trump’s presidency, the process seems to be moving slowly. Paul Atkins, appointed in place of former SEC Chair Gary Gensler, has yet to be officially approved by Congress. This makes it unlikely for the XRP ETF applications, along with other alternative crypto ETFs like Solana, Litecoin, and Dogecoin, to be approved before Atkins assumes his role.

Although historically, SEC chair appointments have usually been finalized by March, the latest Semaphore report suggests that the White House has yet to complete the necessary documentation, indicating a potential further delay in the XRP ETF process.

NEW XRP ETF APPLICATION FROM FRANKLIN TEMPLETON

Despite the SEC postponing decisions on current applications, major investment firms continue to show interest in XRP ETFs. Most recently, Franklin Templeton, managing assets totaling $1.68 trillion, filed a new ETF application called “The Franklin XRP Trust.”

The application documents indicate that the fund’s assets will largely consist of XRP and aim to track its price performance. Franklin Templeton had previously applied for and secured approval for Bitcoin and Ethereum ETFs. However, these funds did not garner as much attention among investors as expected.

Among the 12 Bitcoin ETFs in operation in the U.S., BlackRock’s iShares Bitcoin Trust holds a 50.85% market share, with Fidelity’s ETF ranking second at 17.5%. Franklin Templeton’s Bitcoin ETF only maintains a 0.46% market share. A similar scenario unfolds among Ethereum ETFs, where BlackRock leads with a 35% share, while Franklin Templeton’s Ethereum ETF lags with a 0.33% market share.

These stats raise questions about whether there will be substantial demand for Franklin Templeton’s XRP ETF if launched. For altcoins that receive ETF treatment, analyst expectations often involve limited institutional demand. However, allowing XRP to be part of exchange-traded funds could increase interest in this digital asset.

According to JPMorgan’s predictions, the funds entering the market upon approval of XRP ETFs could reach $8 billion in the first 12 months. Additionally, the possibility of including XRP in ETFs tracking multiple cryptocurrencies is being considered.

NEXT STEPS FOR XRP ETFs

The future of the XRP ETF process will be shaped by the SEC’s new leadership and market dynamics. The most pressing question for XRP investors is when the SEC will provide clarity amidst the ongoing uncertainty. With Paul Atkins assuming his role, the process is expected to accelerate, but the approval process between the White House and Congress will be a critical factor determining the timeline.

While significant developments regarding XRP ETFs may not be expected in the near term, the involvement of major players like Franklin Templeton could increase institutional interest in XRP in the long run. However, it should not be forgotten that assets other than Bitcoin and Ethereum have generally received limited investor interest in the ETF market.

In the coming months, how the SEC will proceed and the regulatory framework that will be established for XRP ETFs will be among the most crucial factors determining investor sentiment in the market.