Analysts at Kaiko have identified key factors that position XRP ahead of other cryptocurrencies for potential spot ETF approval by the U.S. Securities and Exchange Commission (SEC).
Analysts at Kaiko have identified key factors that position XRP ahead of other cryptocurrencies for potential spot ETF approval by the U.S. Securities and Exchange Commission (SEC). With the SEC required to respond to Grayscale's spot XRP ETF filing by May 22, the anticipation is building.
Kaiko's report highlights XRP's superior market liquidity, noting that it has the highest average altcoin market depth on major centralized exchanges. This high liquidity indicates a stable market environment, which is viewed favorably by the SEC. XRP currently leads in active ETF applications, boasting 10 filings, compared to five for Solana and three each for Litecoin and Dogecoin.
Additionally, the recent launch of Teucrium's leveraged XRP ETF, designated XXRP, adds another layer of complexity. This product aims to provide twice the daily return of XRP through derivatives and has emerged as the first leveraged XRP ETF in the United States. However, a traditional spot XRP ETF has yet to receive SEC approval.
Despite these developments, demand for spot XRP ETFs remains uncertain. Analysts have noted that the market for Ethereum ETFs has seen limited traction, and many institutional investors still favor Bitcoin.
The options market for XRP has shown bearish sentiment, reflecting broader market uncertainty rather than specific concerns about ETF approval.
Other cryptocurrencies, such as Litecoin and Solana, are also in contention for ETF approval. Litecoin is viewed as a strong candidate due to its similarities to commodities. Furthermore, Canada is preparing to launch spot Solana ETFs, often preceding similar approvals in the U.S.
As the SEC deliberates its long-term crypto regulatory strategy, the upcoming deadline for Grayscale's filing may provide clarity on XRP's potential as a frontrunner in the ETF race.
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