TL;DR
ETF approval could fuel triple-digit XRP gains in the medium term (according to ChatGPT). Despite the positive outlook, there is a risk of a “buy the rumor, sell the news” effect, where prices fall after the green light is given.
Potential price target
Since the launch of exchange-traded funds (ETFs) tracking the performance of Bitcoin (January 2024) and Ethereum (July 2024) in the United States, industry insiders have been wondering what will happen next. Ta.
There have been some recent signs that an XRP ETF may be operational in the near future. Bitwise registered such an investment product in Delaware in early October, and Canary Capital followed suit a few days later. The former has not yet applied for an ETF with the U.S. Securities and Exchange Commission (the agency that decides whether these funds are approved), but the latter has already done so.
The commission has been in a legal battle with Ripple for nearly four years, meaning it could be very difficult to get the green light from Ripple. However, it may not completely agree and could drive up the price of XRP significantly. We decided to ask ChatGPT to specify exactly how much the valuation would jump in that case.
The AI-powered chatbot estimated that the token price could rise to $1.50 within months of approval. However, this exponential rise depends on other factors, such as increased institutional investment and broader market adoption.
ChatGPT went further and predicted that the potential green light for the XRP ETF, coupled with a favorable resolution of the Ripple vs. SEC lawsuit, could push the asset value above $2.50 in the medium term.
There have been several important recent developments in this case. As reported by CryptoPotato, the regulator has appealed a 2023 ruling by Federal Judge Torres that said the secondary sale of Ripple’s XRP tokens did not constitute a sale of securities.
Prior to the lawsuit, a magistrate judge ordered the company to pay a $125 million fine for violating certain securities laws, a fraction of the $2 billion originally sought by the SEC. Not too much.
Beware of selling news effects
Conversely, ChatGPT warned investors that even if an ETF to track the asset’s performance is approved, the value of XRP could decline due to any behavioral factors.
One example is the phenomenon of “buying rumors and selling news.” In this phenomenon, prices rise in anticipation of a positive event and then plummet after the official announcement.
“While an ETF’s approval generally signals a positive outlook for the asset, XRP’s reaction will largely depend on timing, market sentiment, and investor behavior. If many traders are already expecting a bullish outcome, , prices may fall due to profit-taking or unfulfilled expectations,” the chatbot claimed.
A classic “pitch the news” event occurred earlier this year. The price of BTC has been gradually rising for several months in anticipation of the approval of the first spot Bitcoin ETF in the US. However, shortly after its launch, the assets took a U-turn and much of the profits were wiped out.
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