XRP approaches $3 as hopes for ETF approval rise: Could $3.60 be next?

Analysts Predict XRP ETF Approval

Key Highlights:

Bloomberg analysts estimate a 95% chance for the XRP ETF approval, anticipating a decision from the SEC in October.

Despite some stable growth, XRPL’s adoption is lagging compared to its peers, holding a mere 2% of real-world assets.

XRP prices stumbled on Tuesday after briefly hitting $3.04, marking its highest point in nearly two weeks. This surge was largely fueled by speculation surrounding the potential approval of the XRP Exchange-Traded Fund (ETF) in the U.S. and an uptick in institutional interest in XRP derivatives, which has some traders wondering if XRP might revisit the $3.60 mark seen back in July.

Demand for XRP futures reported a 5% increase from the prior month, amounting to XRP 26.9 billion, about $7.91 billion at current valuations. Particularly noteworthy is the 74% rise in outstanding XRP futures contracts on the Chicago Mercantile Exchange (CME) over the same 30-day span, reaching XRP 386 million. This uptick suggests a stronger engagement from professional fund managers and market makers.

While high futures trading activity is usually a positive sign, it’s important to note that both long and short positions tend to balance each other out. However, monthly futures contracts can sometimes indicate leverage disparities. In fairly neutral market conditions, XRP futures generally see longer settlement timelines, typically outpacing spot markets by about 5% to 10%.

Currently, XRP Monthly Futures are trading at a 7% premium, with leverage demand remaining steady—consistent with last month’s trends. One possible reason for the cautious outlook could be XRP’s underperformance compared to the broader altcoin market capitalization.

Since August, XRP has remained largely flat, while the altcoin market as a whole surged by 14%. This overall rise was bolstered by impressive profits from notable assets: 32% on high-profile projects, 28% on Solana’s SOL, 19% on Cardano’s ADA, and 18% on Ether (ETH). XRP’s noteworthy momentum in August can be traced back to the resolution of a longstanding dispute between Ripple and the U.S. Securities and Exchange Commission (SEC).

XRP’s Future Tied to U.S. ETF Decision

The chance of the XRP ETF getting approved in the U.S. has significantly influenced its recent price movements. Bloomberg’s analysts reveal that while the SEC’s final verdict is expected towards the end of October, it could boost the likelihood of approval to over 90%. There’s also talk of a potential Rex-Sosprey product that would merge ETF and ETN frameworks and might not require direct SEC clearance, mirroring the Solana Staking (SSK) model.

Ripple’s Stablecoin, RLUSD, has gained traction, surpassing $700 million in assets. While these figures look encouraging, it’s worth noting that nearly 90% of its supply is on the Ethereum network, resulting in limited demand for XRP-ledger transactions. The stablecoin market is largely dominated by established players like Circle’s USYC and World Liberty’s USD1.

Some investors are hopeful that XRPL can transform into a key player in international payments, potentially replacing the existing Swift infrastructure or enhancing its role in tokenization. Still, data from RWA.xyz reveals that only 2% of real-world assets are associated with smaller blockchains like Avalanche, Stellar, and Aptos within the XRPL.

While a rebound to $3.60 for XRP isn’t completely impossible, given XRPL’s modest total value locked (TVL) of $100 million, the chances of sustaining such momentum seem limited.