Ripple's (XRP) Settlement with the SEC Could Lead to the Creation of the First-Ever XRP Exchange-Traded Fund (ETF)

This comes after a prolonged legal battle, ending with Ripple paying a $125 million penalty.

Ripple’s settlement with the U.S. Securities and Exchange Commission (SEC) could lead to the creation of the first-ever XRP Exchange-Traded Fund (ETF).

The development comes after a prolonged legal battle, which began in December 2020 when the SEC accused Ripple of conducting an unregistered securities offering by selling XRP. The legal battle took a significant turn in July 2023 when a U.S. District Judge ruled that XRP is not a security when sold to retail investors through exchanges. However, it is classified as a security when sold to institutional investors, resulting in a mixed ruling.

Ripple's recent settlement reduced its financial penalty from nearly $2 billion to $125 million. This outcome provides Ripple with much-needed regulatory clarity. With this clarity, Ripple can now focus on expanding XRP’s market presence without legal uncertainties.

According to analysts, this settlement could be a stepping stone toward the approval of an XRP ETF, similar to the Bitcoin and Ethereum ETFs approved earlier this year.

Could XRP Be the Next Big ETF?

Now that Ripple’s legal troubles are largely behind it, the company is well-positioned to explore the ETF market. Several market analysts have expressed optimism regarding the possibility of an XRP ETF. The recent legal clarity around XRP’s status further strengthens this speculation.

“For any altcoin ETF, the key is having market futures contracts, which are regulated by the CFTC. XRP has this, unlike other coins,” said Nate Geraci, an ETF analyst.

Crypto commentators like MackAttackXRP have also chimed in, predicting that XRP ETFs could hit the market between mid-2024 and 2025. This development could tap into the $1.2 trillion derivatives market.

However, despite the positive outlook for an XRP ETF, some challenges remain. Rumors suggest that the SEC might appeal the settlement, which could complicate matters further. For now, the settlement seems to offer a definitive conclusion to the legal dispute, allowing Ripple to shift its focus toward capitalizing on this regulatory win and advocating for the new ETF.

The SEC settlement has given XRP a level of regulatory clarity that many other cryptocurrencies lack. This clarity could attract more investors who previously avoided XRP due to legal uncertainties. Crypto analyst Doctor Profit recently highlighted XRP's strong position to be considered for an ETF, possibly even ahead of other contenders like Solana.

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