The impending departure of SEC Chair Gary Gensler in January 2025 has contributed to XRP’s recent performance, sparking optimism for a more favorable regulatory environment. Speculation about the potential launch of an XRP-based exchange-traded fund (ETF) and record activity in XRP’s derivatives market have also fueled the price surge.
WisdomTree has filed an application to the US Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF). This move makes WisdomTree the fourth company to seek SEC approval for an XRP-based ETF. The proposed WisdomTree XRP Fund aims to track the price of XRP and offer investors exposure through shares listed on the Cboe BZX Exchange. WisdomTree’s filing follows its successful launch of a Bitcoin ETF earlier this year.
The application details that the ETF will utilize a cash-create method for share creation and redemption, with Coinbase affiliates serving as the prime execution agent and XRP custodian. The Bank of New York Mellon will act as the fund’s administrator. This development comes as Ripple continues its legal battle with the SEC over XRP’s regulatory status. Despite the uncertainty, WisdomTree’s move, along with similar filings from other asset managers like Bitwise, Canary Capital, and 21Shares, suggests growing interest in XRP-based investment products, and this could further drive XRP price up more and more
This post will analyze the potential impact of Wisdom Tree’s ETF filing on XRP price and explore possible outcomes.
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Understanding Wisdom Tree’s ETF Filing
A spot ETF is an exchange-traded fund that tracks the price of an underlying asset, in this case, XRP. Unlike existing cryptocurrency investment products, such as futures-based ETFs or trusts, a spot ETF provides direct exposure to the asset’s price movements. This means that investors can gain exposure to XRP without having to directly hold the cryptocurrency, providing a more accessible and regulated investment option. Spot ETFs are usually backed by a reserve of the underlying asset, which is held in a custodial account. This provides an additional layer of security and transparency for investors.
The potential benefits of a spot XRP ETF for investors are numerous. For one, it provides a more direct and efficient way to gain exposure to XRP price movements, eliminating the need for intermediaries or complex investment structures. This can result in lower fees and costs for investors, making it a more attractive option. Also, a spot ETF offers regulatory clarity and transparency, as it is subject to the same rules and regulations as other ETFs. Furthermore, a spot XRP ETF can provide investors with the ability to diversify their portfolios and gain exposure to the cryptocurrency market, which can be an attractive option for those looking to hedge against inflation or market volatility.
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Historical Context: XRP’s Price Performance from Inception till date.
XRP was created in 2012, and its initial price was around $0.005. In 2013, the price fluctuated between $0.01 and $0.05, with a peak price of $0.057 in July. The price declined towards the end of the year, closing at around $0.02. In 2014, XRP’s price continued to fluctuate, ranging from $0.005 to $0.03. The price experienced a significant surge in November, reaching $0.029, but declined towards the end of the year, closing at around $0.02.
XRP’s price remained relatively stable, fluctuating between $0.005 and $0.02. The price experienced a slight surge in July, reaching $0.014, but declined towards the end of the year, closing at around $0.01, in 2015. In 2016, XRP’s price experienced a significant surge, reaching $0.028 in May. The price declined towards the end of the year, closing at around $0.006, while 2017, its price experienced a massive surge, reaching $3.84 in January 2018. The price had increased by over 14,000% in just one year, making it one of the best-performing cryptocurrencies of 2017.
In 2018, XRP’s price declined significantly, falling to $0.28 by the end of the year. The price fluctuated throughout the year, with several surges and declines, and price continued to fluctuate in 2019, ranging from $0.28 to $0.46. The price experienced a significant surge in June, reaching $0.46, but declined towards the end of the year, closing at around $0.19, and in 2020, XRP’s price declined significantly, falling to $0.18 by the end of the year. The price fluctuated throughout the year, with several surges and declines.
In 2021, XRP’s price experienced a significant surge, reaching $1.96 in April. The price declined towards the end of the year, closing at around $0.80. In 2022, XRP’s price continued to fluctuate, ranging from $0.32 to $0.91. The price experienced a significant surge in September, reaching $0.55, but declined towards the end of the year, closing at around $0.34, and price fluctuated throughout 2023, ranging from $0.32 to $0.70. The price experienced significant surges in March and July, reaching $0.54 and $0.70, respectively. And this year, 2024, XRP’s price has experienced a significant surge, reaching $2.39 in December. The price fluctuated throughout the year, with several surges and declines, but ultimately ended the year on a high note.
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XRP price history reflects its huge influence in the cryptocurrency market, marked by periods of rapid expansion and subsequent corrections, mirroring the volatility characteristic of the broader cryptocurrency landscape. It is necessary for potential investors to recognize that past performance does not guarantee future results and to conduct comprehensive research before making investment decisions.
Ripple’s XRP price experienced significant fluctuations, surging in 2021 but declining in 2022. As of December 3, 2024, the price of one XRP token was $2.53. Notably, XRP’s price spikes occurred relatcausedively late compared to other cryptocurrencies, primarily due to the US SEC’s legal complaint against Ripple in November 2020, which the price to plummet.
XRP price is largely influenced by developments in cross-border payments, particularly in Southeast Asia, where the company is actively engaged. News and announcements related to this region can trigger price spikes. For instance, in 2019, the XRP price increased after Japan and South Korea began testing a system to reduce international fund transfer times and costs. Similarly, Ripple’s acquisition of a 40% stake in Malaysian cross-border payments firm Tranglo in March 2021 had a positive impact on the price.
XRP’s market capitalization history has been instrumental in establishing its prominent position within the cryptocurrency landscape. Consistently ranking among the top cryptocurrencies by market capitalization, XRP has demonstrated a high level of investor interest and confidence. This substantial market capitalization has also enhanced XRP’s liquidity, making it a favored choice among traders and investors. Nevertheless, market capitalization is just one aspect to consider when assessing a cryptocurrency’s potential; other crucial factors include technological advancements, regulatory frameworks, and community backing.
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The Potential Effects of Wisdom Tree’s ETF Filing on XRP Price
Bitcoin price has seen new heights since approval of Bitcoin ETFs. Following the historic US SEC approval, spot Bitcoin ETFs witnessed a record-breaking weekly inflow of $3.38 billion, with BlackRock’s IBIT product alone accounting for $2.05 billion. This surge in investment propelled Bitcoin’s price to an all-time high of $99,655.50 on November 22, 2024, and despite a slight retreat, it remains bullish, trading at $98,396, up 133% year-to-date. The increased institutional and retail investor interest, fueled by the regulatory clarity and accessibility provided by Bitcoin ETFs, has contributed to the price growth. As a result, Bitcoin is poised to breach the $100,000 threshold, with analysts remaining optimistic about its short-term outlook, and this could likely be the case for XRP.
The potential positive effects of Wisdom Tree’s ETF filing on XRP’s price are significant. For one, the introduction of a spot XRP ETF could increase liquidity in the market, making it easier for investors to buy and sell XRP. This, in turn, could lead to increased institutional investment in XRP, as investors seek to take advantage of the cryptocurrency’s potential for growth. Additionally, the regulatory clarity provided by the ETF filing could help to boost investor confidence in XRP, leading to increased demand and, subsequently, higher prices.
However, there are also potential risks and challenges that could impact XRP’s price. For example, the SEC’s approval of Wisdom Tree’s ETF filing is not guaranteed, and regulatory hurdles could delay or even prevent the launch of the ETF. Additionally, market volatility could impact XRP’s price, regardless of the ETF filing. If the broader cryptocurrency market experiences a downturn, XRP’s price could fall, regardless of the potential benefits of the ETF. Furthermore, the ongoing legal battle between Ripple and the SEC could also impact XRP’s price, as the outcome of the case remains uncertain.
Wisdom Tree’s ETF filing could also have a significant impact on XRP’s market dominance and competitiveness. If approved, the ETF could help to increase XRP’s visibility and attractiveness to institutional investors, potentially leading to increased market share. Additionally, the introduction of a spot XRP ETF could help to level the playing field between XRP and other cryptocurrencies, such as Bitcoin and Ethereum, which already have established ETFs. However, it is also possible that the ETF could face competition from other XRP-based investment products, which could limit its impact on XRP’s market dominance.
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Market Sentiment on XRP Current Trend
The market sentiment and investor attitudes towards XRP and Wisdom Tree’s ETF filing have been largely positive. The filing has been seen as a significant development for XRP, with many investors viewing it as a step towards mainstream acceptance. The increased visibility and accessibility that an ETF would provide are expected to attract new investors to the market, potentially driving up demand and prices. Additionally, the filing has been seen as a vote of confidence in XRP’s potential as a digital asset, which has helped to boost investor sentiment.
The implications of Wisdom Tree’s ETF filing for XRP and the broader cryptocurrency market are significant. A successful ETF launch could help to increase XRP’s visibility and accessibility, potentially driving up demand and prices. Additionally, the filing could help to pave the way for other cryptocurrency ETFs, which could lead to increased mainstream acceptance and adoption. However, it is worth noting that the SEC’s approval of the ETF is not guaranteed, and regulatory hurdles could still pose a challenge. Nevertheless, the filing represents a significant step forward for XRP and the cryptocurrency market as a whole.
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Victor Solomon is a technical analyst at Crypto Asset Buyer (CAB). Over the years, Victor has gained valuable expertise in market analysis, risk management, and community management within the cryptocurrency ecosystem. The founder of Soluvic Crypto Hub, a crypto community where he equips newbies in the space, Victor’s mission is to empower individuals to uncover opportunities and safely navigate risks in the blockchain industry. Victor’s academic foundation includes a BSc. (Ed) in Mathematics, a credential that underpins his strong analytical and problem-solving abilities. Currently, he is expanding his technical expertise as a Software Development student at Brigham Young University. He is an Ex African Manager of Newscrypto.
