The long-standing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs appears to be nearing its conclusion after four arduous years. This development has led experts to believe that the path is now open for an XRP exchange-traded fund (ETF) to materialize in the United States.
Nate Geraci, a recognized ETF analyst, has expressed his optimism regarding potential XRP ETFs. He opines that with the legal uncertainties finally addressed, prominent financial institutions such as BlackRock and Fidelity are likely to seek approval for financial products that track Ripple’s native asset.
The Path to XRP ETFs in the U.S.
In a recent post on X dated March 26, the President of the ETF Store remarked:
“Seems obvious spot XRP ETF approval simply matter of time IMO. And yes, I expect BlackRock, Fidelity, etc to all be involved.”
Geraci emphasized that XRP is among the largest crypto assets by market capitalization, exceeding a remarkable $144 billion. He believes that such significance will compel the largest ETF providers in the country to consider the asset’s immense potential.
Despite the SEC’s cautious stance on the approval of altcoin ETFs, Geraci holds the view that the agency will eventually come around. He also stressed the ongoing debate within the investment sector regarding whether broad crypto index ETFs or single-asset offerings will ultimately dominate the landscape. Although he remains optimistic about the expansion of these financial products, he anticipates that the regulator will draw lines regarding what can or cannot be approved.
The legal struggle between Ripple and the SEC has long been perceived as a significant barrier to the approval of an XRP ETF. The saga began in 2020 when the SEC accused Ripple of conducting unregistered securities sales via its XRP token.
In 2023, a landmark decision by Judge Analisa Torres stated that Ripple’s programmatic sales of XRP did not violate securities laws. Nevertheless, she determined that institutional sales of the asset fell foul of legal requirements, resulting in a $125 million fine for Ripple. The SEC subsequently filed an appeal against the ruling, prompting Ripple to respond with its own cross-appeal, prolonging the legal battle.
A Long-Awaited Conclusion
After extensive legal maneuvering, a restructured SEC recently chose to drop its appeal, and Ripple soon followed suit. The company agreed to settle with a reduced fine of $50 million, instead of the original $125 million mandate, with the remainder to be refunded.
The prospective resolution of this case, coupled with speculation around an imminent ETF, has caused XRP to surge past $2.5, although it has settled back slightly since. Currently, XRP is trading at $2.45, marking a 1.3% increase over the last 24 hours. Over the past week, it has gained 7.3%, outperforming the broader crypto market, which has seen only a 2% increase.
The implications of Ripple’s legal triumph and the potential for an ETF underscore a transformative period for the cryptocurrency space, paving the way for more robust institutional involvement in the future.
