The first US-domiciled XRP ETF launched on Thursday, September 18, fueling speculation about a potential XRP breakout. The REX-Osprey XRP ETF (XRPR) gives investors exposure to XRP, XRP-linked ETFs, and XRP derivatives.
The REX-Osprey XRP ETF reported net inflows of $15 million on its first day, disappointing traders. For context, the US BTC-spot ETF market registered total net inflows of $655.2 million on day one and $1.594 billion in January 2024, setting a high bar for XRP ETFs.
Two other ETFs launched on Thursday, September 18: the Grayscale Digital Large Cap Fund (GDLC) and the REX-Osprey DOGE ETF (DOJE).
Bloomberg Intelligence Senior ETF analyst Eric Balchunas commented on the first day’s performances of XRPR, the Grayscale Digital Large Cap Fund, and the REX-Osprey DOGE ETF, stating:
“GDLC (the first spot crypto ‘5’ basket ETF) did $22m on its first day as an ETF. Really solid. DOJE did $12m and XRPR did $15m. All of them crush the avg ETF launch altho far cry from bitcoin. Still, gotta be happy with that if you are those issuers.”
XRPR may have fallen short of market expectations. However, given that the ETF has a hybrid investment strategy, institutional investors may be holding out for XRP-spot ETFs.
Seven ETF issuers await the SEC’s final decision on XRP-spot ETF filings, including 21Shares, Bitwise, Canary Capital, CoinShares, Grayscale, and WisdomTree. However, investors may have to wait until October 18 for the SEC to announce its decisions. While final decision deadlines range from October 18 to November 14, it’s plausible the SEC will decide on all seven on the same day to mitigate first-mover advantage.
The SEC approved all eleven BTC-spot ETFs on January 10, 2024, preventing one issuer from capturing early market share by being first to market.
BlackRock (BLK) remains one notable absentee from the list of XRP-spot issuers awaiting SEC approval. A BlackRock iShares XRP Trust inclusion could be pivotal to the success of an XRP-spot ETF market.
For perspective, iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA) have reported net inflows of $60.4 billion and $13.3 billion, respectively, since launch. For comparison, Fidelity’s BTC-spot and ETH-spot ETFs, the second largest by inflows, have registered net inflows of $12.8 billion and $2.9 billion, respectively.
An iShares XRP Trust filing could be on the horizon, given that the SEC approved the rule change requests from Cboe, Nasdaq, and NYSE. The exchanges requested approval for the Generic Listing Standards for Commodity-Based Trust shares. The GLS means that issuers can list and trade crypto-spot ETFs without the SEC’s review process.
Notably, BlackRock had met with the SEC Crypto Task Force in May to discuss ETF approval standards. The GLS approval could pave the way for BlackRock to list and trade altcoin-spot ETFs, including an iShares XRP Trust.
However, the ETF issuer may assess the demand environment before considering a filing.
Despite solid ETF inflows on day one, XRP tracked Bitcoin into negative territory on Friday, September 19. Pro-crypto lawyer Bill Morgan remarked:
“There is no mystery why XRP price is down the last 24 hours. Just playing follow the leader. This is the overwhelming reality and the most significant factor in XRP price movement, which is heavily correlated with Bitcoin price dynamics. It is consistent with Ripple’s expert evidence in the SEC v Ripple lawsuit.”
Morgan was likely referring to expert testimony arguing XRP is not a security. Ripple’s expert submitted a declaration and a report in 2022 showing the token’s high correlation with BTC (often 0.8-0.95 on a rolling 30-day basis). Doody also provided evidence showing that Ripple’s XRP sales, escrow releases, and corporate statements had negligible impact on price.
The evidence was pivotal in the SEC v Ripple case and Judge Analisa Torres’ 2023 ruling that programmatic sales of XRP did not satisfy the third prong of the Howey Test.
BTC fell 1.13% on Friday, September 19, closing at $115,784.
XRP slid 2.67% on Friday, September 19, following the previous day’s 0.3% loss, closing at $2.9926. The token underperformed the broader market (-1.69%) but traded close to the psychological $3 level. Traders are watching the following technical levels:
In the near term, several key events could drive price action:
XRP’s price outlook hinges on whether institutional inflows and regulatory approvals align, or if headwinds dominate.
Bearish Scenario
These bearish events could push XRP toward $2.8, exposing $2.5, the next key support level.
Bullish Scenario
These events could drive XRP above $3, bringing $3.2 into sight. A sustained break above $3.2 could pave the way to $3.335, opening the door to testing the record high of $3.66 (Binance).
XRP sits at a pivotal moment in crypto history. Spot ETF approvals and regulatory breakthroughs could send the token to new highs, while setbacks could drag it toward $2.5. For traders, events over the next few weeks could determine whether XRP reaches new highs or tumbles on regulatory and market developments.
Analysts will closely monitor how regulatory and economic risks affect XRP’s trajectory in the coming weeks.
With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.
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