The potential approval of an XRP Exchange-Traded Fund (ETF) has generated significant excitement within the XRP community.
Analysts and community members are speculating on the impact such a product could have on the price of XRP, especially if it garners half the inflows that Bitcoin ETFs have attracted since their launch.
The Potential of an XRP ETF in Attracting Capital
ETFs have proven to be a key tool in bringing institutional capital into cryptocurrency markets. This trend was demonstrated by Bitcoin, which has seen over $17 billion in inflows since the introduction of its ETF products.
These products have played a role in Bitcoin reaching new all-time highs, even before the next scheduled halving. While inflows have slowed since the first quarter of the year, Bitcoin ETFs remain profitable for investors.
Given this success, the conversation has expanded to include the possibility of ETFs tied to other cryptocurrencies. Ethereum was the next asset to receive ETFs, though the inflows for these products have been comparatively lower than Bitcoin’s. Nevertheless, XRP supporters believe their asset could be next in line for an ETF launch, citing its regulatory clarity as a major advantage.
Ripple CEO Brad Garlinghouse, mentioned in May that ETFs linked to assets such as XRP, Solana, and Cardano could be on the horizon. This statement has fueled expectations among investors. Adding to this anticipation, Grayscale Investments recently reinstated its XRP Trust, marking the first in a series of steps toward potentially launching an XRP ETF.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
Projected Price Impact of an XRP ETF
XRP ETF launch could spur similar activity among other asset managers, much like what occurred with Bitcoin and Ethereum. If this happens, XRP could see a substantial price increase, assuming it experiences success comparable to Bitcoin’s ETF offerings.
For example, Bitcoin ETFs have collectively seen inflows of $17.698 billion since their inception. If XRP ETFs attract 50% of those inflows, approximately $8.849 billion would be added to XRP’s market. Assuming an inflow-to-market capitalization multiplier of 1:10, this injection could potentially increase XRP’s market valuation by $88.49 billion.
Currently, XRP holds a market valuation of around $30.50 billion. If $88.49 billion in new capital were to enter the market, XRP’s total market capitalization would rise to approximately $118.99 billion. With a circulating supply of about 56.56 billion tokens, this increased market cap would drive XRP’s price to $2.15.
Historical Context and Future Outlook
The last time XRP saw prices above the $2 mark was in January 2018, during significant volatility following its all-time high of $3.31. A return to such price levels would mark a significant milestone for XRP, especially given the regulatory challenges and market fluctuations the asset has faced since then.
Grayscale’s reintroduction of its XRP Trust has set the stage for a potential ETF launch, which could further strengthen investor confidence in XRP. Should an XRP ETF be approved, it would not only bolster institutional involvement but also pave the way for increased market liquidity and stability.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
Follow us on Twitter, Facebook, Telegram, and Google News
