Following the debut of the first cryptocurrency-based exchange-traded funds (ETFs) in the United States, investors are now anticipating the next digital asset trading product.
When asked about the possibility of an XRP (XRP) ETF, Tim McCourt, senior managing director at CME Group, said the first major step had been taken.
During a panel discussion at Ripple Swell 2024, McCourt said:
“We do have an XRP reference rate and a real-time index, which is a first step in building out this ecosystem […] We have upwards of 50 real-time prices and reference rates. That’s key for product providers like Bitwise because they can at least point to a fully regulated benchmark.”
McCourt’s comments came a week after the Securities and Exchange Commission received its second application for an XRP ETF, from Canary Capital, according to Bloomberg ETF analyst Eric Balchunas.
Canary XRP ETF filing with SEC. Source: Eric Balchunas
Canary was the second provider to apply for an XRP ETF, following Bitwise Asset Management.
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ETFs speeding up crypto industry growth
The advent of the first spot Bitcoin (BTC) and Ether (ETH) ETFs marked a turning point for the cryptocurrency industry, helping to legitimize the sector.
McCourt said the introduction of ETFs has significantly accelerated the industry growth:
“I don’t think it’s accidental that some of our largest open interest days and volume-based futures have happened after the advent of the ETFs because this ecosystem is really accelerating.”
Panel discussion. Ripple Swell. Source: Cointelegraph
Despite the enthusiasm around a potential XRP ETF, the token’s price has been struggling to gain momentum amid a wider crypto market rally.
Over the past year, the XRP price rose just over 8%, while Bitcoin’s price rose more than 154% during the same period, according to Cointelegraph data.
XRP and BTC, 1-year chart. Source: Cointelegraph
ETFs can significantly bolster the price of the underlying cryptocurrency. For Bitcoin, spot ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
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XRP or SOL ETF first?
Beyond XRP, the uncertain possibility of a spot Solana (SOL) ETF has also created excitement among crypto investors, who see it as a potential price catalyst.
Brazil’s first Solana ETF was approved on Aug. 7, setting a precedent for other global jurisdictions.
While a US-based spot Solana ETF remains uncertain, its prospect makes it a plausible price catalyst, according to Alejo Pinto, former IBM blockchain growth lead and founder of Solana layer-2 network Lumio.
Pinto told Cointelegraph:
“Since it is still very uncertain, an ETF approval in the US would have a positive price impact on Solana since the probability is low and therefore not yet priced in.”
Others, including Manthan Dave, co-founder of Palisade, a Ripple-backed digital asset custody platform, foresee a Solana ETF as soon as the end of 2024.
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