Kaiko Analysts Highlight Key Date to Watch for SEC Approval

Bloomberg analysts have observed that the leveraged XRP fund has more trading volume than the previously launched Solana futures ETFs.
According to Kaiko, XRP trading primarily occurs outside the US and currently lacks a futures market, which could be an obstacle for ETF approval.
However, increasing spot trading volume on US exchanges and the successful launch of the 2x XRP ETF position XRP well for potential ETF approval.
May 22 is a key date as the SEC must respond to Grayscale’s spot XRP filing by then, with experts noting that arguments against approval are becoming increasingly weak.

According to Bloomberg analysts, the 2x leveraged XRP fund has seen more trading than Solana futures exchange-traded funds (ETFs), which were launched earlier. While both XRP and Solana are among the most sought-after assets for the next wave of crypto ETFs, interest in XRP appears to be slightly higher, with nine filings submitted.

Live US crypto ETF applications, source: Kaiko, SEC/EDGAR

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In a recent analysis, Kaiko analysts highlighted that XRP trading is largely outside of the US and that it currently lacks a futures market. The Bitcoin ETFs were approved largely because there was an active futures market, the analysts said.

The [SEC] had approved a BTC futures ETF that relied on the CME futures market, and since the futures and spot markets were over 99% correlated, the regulator eventually had to concede and approve the ETF

Kaiko

So, while this may limit the chances of XRP ETF approval, the analysts point to rising spot trading volumes on US exchanges. This and the recent launch of the leveraged XRP fund should be positive for the fourth-largest crypto.

This underlying markets [sic] improving dynamics and the launch of a 2x XRP ETF last week position XRP ahead of other assets when it comes to approval.

Kaiko

Kaiko Says SEC Has Increasingly Weak Argument for ETF Rejection

Kaiko’s analysis goes further, saying that despite positive developments for XRP, the options market on Deribit shows a bearish outlook, with traders looking for downside protection ahead of the April 18 expiry – likely due to ongoing macroeconomic uncertainty.

The SEC has acknowledged several XRP ETF applications, and all eyes are on May 22, the deadline to respond to Grayscale’s spot XRP filing. Given that a 2x leveraged XRP ETF has already been approved, the case for rejecting a spot ETF appears increasingly weak:

Since this leveraged ETF relies on returns from European ETPs and swap agreements to guarantee twice the daily returns of XRP, it’s hard to see how a spot product is more risky and therefore diminishes most arguments for denying these applications.

Kaiko

At the time of reporting, XRP is trading at US$2.14 (AU$3.37), an increase of 12.5% over the past week. This comes despite the potential for more economic headaches as China and the US continue with retaliatory tariff measures.

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