The US Securities and Exchange Commission (SEC) approved the launch of three XRP futures-based Exchange-Traded Funds (ETFs) by Proshares Trust on April 30th. On January 17th, just days before the now-code-friendly President Donald Trump was launched, ProShares had proposed the next ETF.
Ultra XRP ETFs provide 2x Leverageshort XRP ETFs. This provides an inverse (-1x) Levarevaritra Short XRP ETF.
These are the second, third and fourth XRP-related ETFs launched in the US on April 8th, with the first XRP Futures ETF by Teucrium beginning trading on the New York Stock Exchange (NYSE) and seeing a “great response.”
However, it is important to note that futures-based ETFs are subject to price transfers in XRP futures contracts. In other words, Proshares' ETFs track XRP prices through XRP indexes. This means that unlike spot ETFs where you need to buy an XRP token, the futures XRP ETF allows you to bet on the price of XRP without retaining the token itself.
Individual applications for Spot XRP ETFs in ProShares are still pending in SEC. However, US Dithers was the first spot XRP ETF by the Hashdex, which began trading in Brazil earlier this week.
However, we do not discount the importance of launching these XRP Futures ETFs. These products offer a regulated way to profit from XRP price transfers and open the door for institutional benefits.
Impact on XRP prices
The Futures-ETF approval had a positive impact on XRP prices, rising 3.5% over the last 24 hours to $2.27 at the time of writing, Cryptoslate data shows. XRP currently has a market capitalization of over $312 billion.
It is interesting to note that the prices of all other tokens with the largest market capitalization except for Bitcoin (up 0.11%) have fallen in the last 24 hours. This shows that XRP prices are opposed to the market and are experiencing the biggest price surge among the top 10 tokens.
Ripple's difficult relationship with SEC has been improved
The launch of XRP-related ETFs in the US is considered a major victory for Ripple, the company behind XRP. Ripple was in hot water with SEC for years. But that changed since Trump took over and his candidate, Paul Atkins, became SEC president.
Trump, who adopted a cryptography-friendly stance in his second term, and Atkins, a cryptography advocate and former SEC committee member, have taken a very different approach from his predecessors. Speaking at a roundtable held by the SEC's Cryptographic Task Force on Friday, Atkins said:
“The market itself seems to indicate that current frameworks need caution.”
Atkins added that because of the SEC's approach under former chairman Gary Gensler, cryptography innovation has been “controlled for the past few years and the past few years.”
In 2020, the SEC sued Ripple, claiming it had violated the securities law by selling XRP.
In July 2023, Ripple secured a partial victory when it determined that XRP had determined it was not qualifying for security when it was sold on a secondary market like an exchange. However, institutional sales of XRP constituted unregistered securities. The judge imposed a $125 million fine, but the SEC appealed the decision.
On March 19, Ripple CEO Brad Garlinghouse announced that the SEC agreed to withdraw the appeal, subject to the committee's vote and approval. Garlinghouse declared that the landmark “the case is over. It's over,” calling the moment a “historic victory.”
On April 10, Ripple and the SEC jointly filed an motion to suspend the minutes of the suit to discuss the terms of the settlement.
The Ripple SEC litigation resolution will have a wide impact on the crypto market as it sets precedents to prove that tokens traded on exchanges are not necessarily evidence.
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