Nate Geraci, president of ETF Store, recently revealed factors that increase the likelihood that the U.S. Securities and Exchange Commission (SEC) will approve an XRP ETF application. Asset management companies Bitwise and Canary Capital applied to the commission to offer the fund, which provides institutional investors with exposure to XRP.
What increases the chances of XRP ETF approval
In an interview on the Thinking Crypto podcast, Nate Geraci said that if Donald Trump wins the US presidential election in November, it will be more likely that the US SEC will approve the XRP ETF. This is because Trump has already promised to create a more crypto-friendly environment in the US if elected.
Geraci added that if that happens, the market will be more likely to witness these and other crypto ETFs. While he cautions that just because Donald Trump wins the election doesn’t mean these funds will automatically see the light of day, he also points out how hostile the current administration is to cryptocurrencies. He pointed out that
This therefore explains why the chances of the ETF being approved are higher under a potential Donald Trump administration than under a Kamala Harris-led administration. He added that things might be different under a Harris administration, but with her as vice president under the current administration, that is unlikely to happen.
This comes as Kamala Harris finally declares her support for cryptocurrencies. However, there were twists and turns as her campaign promise focused solely on protecting black men who invest in and own cryptocurrencies.
Why approval is still not easy
Nate Geraci further provided insight into why the approval of the XRP ETF by the US SEC will still not be straightforward even if Donald Trump wins. He pointed out that there are currently no XRP futures contracts traded on CME. This may be a problem considering that spot Bitcoin and Ethereum ETFs both came to market because of the CME futures market.
In the Grayscale case against the US SEC, the court ruled that there is a correlation between the futures market and the spot market. This ultimately forced the SEC to approve the Spot Bitcoin ETF and Ethereum ETF, as both companies had a futures market and a futures ETF.
However, this is not the case with XRP, and the approval of the XRP ETF is still in jeopardy. The market expert said he doesn’t think a futures market is needed. But that’s how the SEC operates, and that’s why a regulatory framework is needed if the commission were to operate any other way.
Meanwhile, Geraci pointed out that the SEC would also require a monitoring sharing agreement to approve the fund to curb market manipulation. The problem is that all exchanges where XRP is currently traded are unregulated.
In line with this, the ETF Store President believes that the best path forward for the industry as a whole is for Congress to introduce a regulatory framework that clearly defines which crypto assets are not securities, and which crypto assets are securities. I believe that.
While the crypto industry appears to be increasingly supporting Donald Trump, Ripple co-founder Chris Larsen has a different opinion. Larsen said he supports Kamala Harris because of the vice president’s understanding of the innovation economy.
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Boluwatife Adeyemi
Boluwatife Adeyemi is an experienced cryptocurrency news writer and editor who has covered topics spanning DeFi, NFTs, smart contracts, blockchain interoperability, and more, among others. Boluwatife has a knack for simplifying the most technical concepts and making them easier for crypto beginners to understand. Outside of writing, he is an avid basketball fan and part-time enthusiast.
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