XRP gains momentum of over 20% in the past week, driven by the bull market, the introduction of a new ETF by 21Shares and the prospect of good crypto regulation.
Ripple's XRP token has seen significant growth over the past 24 hours, rising by more than 20%. This rise is due to several factors, primarily the introduction of an ETF (exchange-traded fund) by 21Shares and market optimism in the face of a more favorable regulatory environment in the United States.
The Rise of XRP: An Expected Rally
XRP has been one of the most volatile tokens in the cryptocurrency market, but in recent weeks it has shown signs of strength. According to The Block's XRP Price Page, the price of XRP has risen by almost 25% in the past 24 hours, reaching a value of $1.08. This rally has led to the token adding almost $20 billion to its market cap, currently placing it at around $61,6 billion.
XRP’s rise is not just an isolated phenomenon. The GMCI 30 Index, which tracks the performance of the top 30 cryptocurrencies on the market, is up just 3% over the same period, underlining XRP’s relative strength compared to other tokens.
XRP ETF Introduced: A Step Forward
One of the key factors that has driven the price of XRP is the filing of an ETF (exchange-traded fund) by 21Shares. Investment firm 21Shares, known for its cryptocurrency investment products, has filed an S-1 registration statement with the United States Securities and Exchange Commission (SEC) to launch the 21Shares Core XRP Trust.
This fund will be listed on the Cboe BZX Exchange, one of the main electronic stock exchanges in the United States, and will have Coinbase Custody Trust Company as custodian, ensuring the security and custody of the assets.
A process of undetermined time
But the process of getting an XRP ETF approved by the SEC can be long and complex. Recall that the SEC, under Chairman Gary Gensler, has been cautious in the past with approving cryptocurrency ETFs, especially after the long legal battle between Ripple and the SEC. However, the recent approval of Bitcoin and Ethereum ETFs has opened the door to the possibility of other tokens, such as XRP, also getting the green light.
In light of this situation, 21Shares has demonstrated its commitment to innovation and expanding access to this asset in the US market. Thus, in a statement, a spokesperson for 21Shares said:
21Shares remains committed to working to expand U.S. investor access to the cryptocurrency asset class and we look forward to driving innovation in the United States.
All of this has generated significant excitement in the market, leading institutional investors to be optimistic about the chances of this fund becoming an attractive option for investing in XRP. In addition, the launch of similar ETFs by other firms, such as Canary Capital and Bitwise, indicates that there is a growing interest in this type of product.
Regulatory Environment: A Positive Change
On the other hand, the regulatory environment in the United States has been constantly evolving, and recent developments have been favorable for Ripple and XRP. The long-running legal battle between Ripple and the SEC, which began in 2020, has entered a new phase. Although the SEC has sanctioned Ripple with a fine of $125 million, Judge Analisa Torres’ ruling has been partially favorable to Ripple, stating that some of the XRP sales did not violate securities laws.
Additionally, Ripple has filed an appeal to review the application of the Howey test to institutional sales of XRP. The Howey test is a criterion used by the SEC to determine whether an asset is a security. If the appeal is successful, it could set an important precedent and reduce regulatory uncertainties that have plagued XRP in the past.
Blockchain Movements: Signals of Confidence
Adding to this, recent movements on the XRP blockchain have also contributed to market sentiment. According to Whale Alert, one wallet has transferred $90 million worth of XRP to another wallet, and over $316 million worth of transfers have been recorded in the past 48 hours. These movements suggest that investors are showing increased interest in XRP, which could indicate an expectation of higher value in the future.
Moreover, the rise of XRP does not only affect this particular token, but also has broader implications for the cryptocurrency market. The introduction of an XRP ETF and the more favorable regulatory environment could have a positive knock-on effect on other blockchain tokens and projects. Institutional and retail investors are paying more attention to cryptocurrencies, and the approval of such ETFs could accelerate the adoption and use of these technologies.
