Analyst: XRP Could Reach $10 if ETFs Are Approved—But What Are the Chances?

Key Takeaways:

• Bloomberg analysts indicate that XRP is the least likely cryptocurrency ETF to receive approval.
• They assigned a 65% probability of approval for the spot XRP ETF, referencing Ripple’s prolonged legal disputes with the SEC.
• Analysts suggest that an XRP ETF could drive the price to between $3 and $10, although significant price fluctuations are expected following approval.

The U.S. Securities and Exchange Commission (SEC) acknowledged a filing for Grayscale’s spot XRP exchange-traded fund on February 14, but Bloomberg ETF analysts James Seyffart and Eric Balchunas assert that Ripple is the least likely cryptocurrency ETF to gain approval.

The formal recognition of the so-called 19b-4 filings by the SEC typically suggests that the regulator is somewhat prepared to evaluate the proposal for ETFs that track the price of XRP, the token associated with Ripple. However, this does not ensure success.

Seyffart and Balchunas recently assessed various spot cryptocurrency ETFs and assigned a 65% chance of the XRP ETF filings being approved by the SEC.

This is the lowest estimate among the four filings analyzed by the Bloomberg ETF analysts. Litecoin (LTC) topped the list with a 90% approval likelihood, followed by Dogecoin (DOGE) at 75%, and Solana (SOL) in third place at 70%.

Source: James Seyffart/Bloomberg.

At least six firms have submitted applications for a spot XRP exchange-traded fund with the Securities and Exchange Commission, including Bitwise, Canary Capital, Grayscale Trust, VanEck, 21Shares, and Knowledge Tree.

The SEC has until mid-October 2025 to reach its final decision. However, Seyffart and Balchunas express uncertainty regarding the XRP ETF, pointing to the token’s ongoing legal struggles concerning its classification as a security or commodity.

“We believe that until the ongoing litigation between Ripple/XRP and the SEC is resolved and/or concluded… you likely won’t see an ETF,” Seyffart stated on X (Twitter). “The SEC needs to untangle that situation.”

In a separate but related post, Balchunas noted it’s important to “remember” that all these odds were below 5% prior to Donald Trump’s election, who labeled himself the “Crypto President.” Trump restructured the SEC.

“So these are actually favorable odds, relatively speaking, and will likely improve as we see these go through the usual process,” Balchunas explained.

XRP’s Legal ‘Mess’

XRP is the native token of the open-source XRP Ledger, created by the founders of Ripple Labs in 2012. Ripple Labs utilizes the token and the blockchain for its cross-border payment services.

XRP currently ranks as the third-largest cryptocurrency by market capitalization, with $158 billion in assets, having increased over 400% from $30 billion in October 2024. However, the asset carries legal challenges that continue to overshadow its performance.

Ripple has been engaged in a legal dispute with the SEC for more than four years. The SEC claims that the company, along with its CEO Brad Garlinghouse and co-founder Chris Larsen, unlawfully sold XRP – which it considers a security – to retail investors on exchanges in 2019.

The agency contends that XRP should be subject to U.S. securities regulations. In 2023, Ripple achieved a partial victory when U.S. District Judge Analisa Torres ruled that XRP is not a security when sold to retail investors on crypto exchanges. The ruling also stated that XRP could be regarded as an unregistered security offering if sold to institutional investors.

This court ruling was hailed as a significant win for the cryptocurrency sector, as it could clarify how numerous other cryptocurrencies targeted by the SEC might be regulated.

However, on October 2, 2024, the SEC filed to appeal Judge Torres’ ruling, a decision Garlinghouse previously described as “misguided.”

If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has harmed the credibility and reputation of the SEC.
Somehow, they still haven’t gotten the message: they lost on everything that… https://t.co/1hW7xVSL9b

— Brad Garlinghouse (@bgarlinghouse) October 2, 2024

Shortly thereafter, Ripple’s chief legal officer Stuart Alderoty announced on X that the company had filed a “cross-appeal” – a type of counter-appeal against the SEC’s court appeal – “to ensure nothing is left on the table.”

SEC Has Discretion to Approve XRP ETF

Since Trump’s election, the outlook has improved. The SEC is now under new leadership and has begun to reduce its enforcement unit, which previously had over 50 attorneys focused on crypto-related cases.

Key crypto adversary Gary Gensler resigned when Trump took office on January 20. Under his leadership, the crypto industry faced more than 400 enforcement actions, the highest of any U.S. administration.

George Georgiades, general counsel at stablecoin payment network Borderless.xyz, anticipates a “favorable resolution” to the XRP issue “in the near future.”

Speaking to Cryptonews, Georgiades stated that while it is customary for the SEC to address regulatory concerns first, the agency still “has the discretion to approve an XRP ETF even with the enforcement action still pending.”

“However, this is also a very different SEC at this time,” the experienced attorney noted, adding:

“Under Chairman [Mark] Uyeda, there has been a swift retreat from the aggressive enforcement posture seen over the past several years, with enforcement actions being paused as the Crypto Task Force reassesses the SEC’s approach. Given this evolving regulatory landscape, I expect a favorable resolution in the very near future that will resolve all pending actions and clear the path for ETF approval in 2025.”

His remarks align with those made by Seyffart, the Bloomberg ETF analyst. Seyffart mentioned he anticipates that the “task force will clarify some of the security versus commodity implications from lawsuits by the end of 2025.”

Uyeda is the new acting chair of the SEC. He recently appointed Hester Peirce, known as “Crypto Mom,” to lead a task force focused on reviewing how the Securities and Exchange Commission regulates crypto assets.

SEC commissioner Peirce has generally expressed support for the crypto industry. During the Gensler era, she frequently criticized the agency’s approach to dealing with cryptocurrencies.

In early February, she published a position paper on the SEC’s website stating, “The Commission’s handling of crypto has been marked by legal imprecision and industry impracticality.”

Bloomberg Odds Are ‘Optimistic’

Orest Gavryliak, chief legal officer at DeFi protocol 1inch, considers the 65% XRP ETF approval odds mentioned by Bloomberg to be “optimistic” given the “prolonged conflict between Ripple and the SEC.”

“Historically, the SEC has been hesitant to approve ETFs when the asset in question is subject to ongoing litigation or ambiguous classification,” Gavryliak told Cryptonews.

“Unlike Bitcoin and Ethereum, where regulators have indicated acceptance of their non-security status.”

Continuing, Gavryliak stated:

“Approval for an XRP ETF is quite unlikely until the SEC vs. Ripple lawsuit is fully resolved or dismissed, or the SEC provides formal regulatory clarity on XRP’s classification. And considering the SEC’s previous cautious approach, the 65% likelihood cited by Bloomberg analysts appears optimistic.”

A favorable outcome in Ripple’s ongoing lawsuit is crucial in establishing that XRP is not a security under U.S. federal securities law.

Analysts suggest that the approval of an exchange-traded fund could provide a boost for the XRP price, which has historically underperformed compared to the broader cryptocurrency market due to Ripple’s legal challenges.

For instance, in August 2024, the price of XRP surged nearly 30% after Judge Torres ordered Ripple to pay a $125 million fine for violating securities laws. The fine was perceived as a victory for Ripple, as the SEC sought $2 billion in damages. Following Ripple’s partial win in June 2023, the XRP price nearly doubled, reaching as high as $0.94.

Since Trump’s election victory in November, the price of XRP has risen from approximately $0.54 to $2.67 as of this writing. This represents an increase of over 390% in less than four months. XRP peaked at over $3.32 in mid-January.

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“The approval of an XRP ETF could significantly elevate XRP’s price due to increased demand, liquidity, and institutional investment,” Forest Bai, co-founder of crypto venture firm Foresight Ventures, told Cryptonews.

He anticipates that the XRP price could move “toward $3 to $10 or higher in bullish scenarios,” stating:

“This will be influenced by market sentiment, regulatory clarity from the ongoing SEC lawsuit, and the ETF’s ability to attract both retail and institutional investors. However, the price may also experience volatility post-approval, similar to the ‘buy the rumor, sell the news’ effect observed with other cryptocurrencies.”

The push for altcoin cryptocurrency exchange-traded funds follows the successful launch of several spot Bitcoin ETFs and Ethereum ETFs in 2024. The SEC had repeatedly rejected these funds, concerned about investor protection.

However, the regulator lost a lawsuit brought by Grayscale Investments, compelling it to approve the ETFs. In approving the funds, former Chair Gary Gensler cautioned that Bitcoin remains a “volatile asset” and investors should exercise caution.

Since their introduction, Bitcoin ETFs have attracted over $40 billion in capital from institutional and retail investors, according to Sosovalue data, making them the “most successful ETFs in history.”

Meanwhile, total Ethereum net inflows reached $3.2 billion as of February 17.

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