BlackRock Puts Brakes on Spot XRP ETF: Asset Giant Says ‘No Plans’ Amid Crypto ETF Frenzy

The cryptocurrency world buzzed with anticipation following the successful launch of spot Bitcoin ETFs, and naturally, eyes turned to the next potential contender: XRP. Could a spot XRP exchange-traded fund (ETF) be on the horizon, potentially opening the floodgates for institutional investment into the token? Many hoped so, especially after BlackRock, the world’s largest asset manager, entered the spot Bitcoin ETF arena and even filed for a spot Ether ETF. However, recent news has poured cold water on those aspirations, at least for now.

BlackRock: No Spot XRP ETF in Sight – For Now?

According to a report from Fox Business reporter Charles Gasparino, citing sources with direct knowledge, BlackRock has stated it currently has “no plans” to launch a spot XRP ETF. This revelation directly contradicts the speculation fueled by BlackRock CEO Larry Fink’s recent ambiguous response when questioned about a potential XRP ETF. His initial “can’t talk about that” comment ignited the rumor mill, leading many to believe BlackRock might be secretly considering an XRP offering.

SCOOP: Despite speculation fueled by recent comments from Larry Fink, sources at BlackRock tell me they are not planning on bringing a spot $XRP ETF to market. As I reported last week, that market is likely to be limited to $BTC $ETH for now at least via tradfi giants like $BLK and $FIDO

— Charles Gasparino (@CGasparino) January 18, 2024

Gasparino’s tweet clearly indicates that, despite the CEO’s seemingly suggestive remarks, internal sources at BlackRock are painting a different picture: an XRP ETF is simply not on the roadmap at this time. This news suggests that for the foreseeable future, traditional finance giants like BlackRock and Fidelity may limit their spot crypto ETF offerings to Bitcoin (BTC) and Ethereum (ETH).

Why No XRP ETF? Possible Factors at Play

While BlackRock hasn’t explicitly stated the reasons behind this decision, we can speculate on a few potential factors:

• Regulatory Landscape: Despite Ripple’s partial legal victory against the SEC, the regulatory status of XRP might still be perceived as less clear-cut compared to Bitcoin and Ethereum. The ongoing legal battle, even with positive rulings, could make institutional investors and asset managers more cautious.
• Market Demand and Maturity: While XRP has a strong community and growing adoption, the institutional demand and overall market maturity for XRP ETFs might not yet be at the same level as Bitcoin or even Ethereum. BlackRock, being a massive asset manager, likely prioritizes products with the broadest appeal and established institutional interest.
• Focus on Bitcoin and Ethereum First: BlackRock’s recent moves clearly indicate a strategic focus on establishing itself in the Bitcoin and Ethereum ETF space. Launching and managing these complex financial products requires significant resources and attention. It’s plausible that BlackRock is prioritizing the successful rollout of these ETFs before considering expanding to other cryptocurrencies.

BlackRock’s Crypto ETF Footprint: Bitcoin and Ethereum Lead the Charge

It’s important to remember that BlackRock is indeed making significant strides in the crypto ETF domain. Their iShares Bitcoin Trust (IBIT) is already trading, providing investors with exposure to spot Bitcoin. Furthermore, they have filed an application with the U.S. Securities and Exchange Commission (SEC) for a spot Ether ETF, named the iShares Ethereum Trust. This proposed ETF aims to directly track the price performance of Ether, further solidifying BlackRock’s commitment to offering diverse crypto investment products.

Coinbase, a major cryptocurrency exchange that recently relisted XRP, is slated to be the custodian for BlackRock’s iShares crypto ETFs. This partnership underscores the growing integration between traditional finance and the crypto industry.

XRP Network Growth and Market Performance: A Silver Lining?

Despite the BlackRock XRP ETF news, the XRP ecosystem itself continues to demonstrate positive momentum:

• Wallet Growth: The number of wallets on the XRP Ledger recently surpassed 5 million, a significant increase from 4 million at the beginning of the previous year. This indicates growing user adoption and network activity.
• Transaction Surge: XRP transactions have consistently remained above 5 million since the start of the year, highlighting sustained network usage and demand.
• Price Appreciation: Over the past year, XRP’s price has surged by approximately 65%, showcasing its resilience and potential for growth.

Moreover, some analysts remain optimistic about XRP’s long-term price potential, suggesting it could potentially reach as high as $27 per token, fueled by Ripple’s legal victories against the SEC. While this remains speculative, it reflects the underlying bullish sentiment within parts of the XRP community.

See Also: SEC’s Analogy For Crypto Investment Made XRP Lawyers, John Deaton, Laugh

The Ripple-SEC Legal Saga: A Recap

To understand the context surrounding XRP and institutional hesitation, it’s crucial to briefly revisit the Ripple-SEC lawsuit. In 2020, the SEC sued Ripple, alleging that XRP was an unregistered security. While Judge Analise Torres delivered a mixed ruling, it was largely seen as a partial victory for Ripple. The judge determined that XRP was a security when sold to institutional investors but not when sold to the general public on exchanges.

This distinction, based on the ‘reasonable expectations’ of purchasers, provided some clarity but also left lingering questions about the regulatory classification of XRP and other cryptocurrencies. While the legal landscape is evolving, the SEC’s stance continues to cast a shadow over the crypto industry.

Looking Ahead: The Future of XRP and Crypto ETFs

BlackRock’s current stance doesn’t necessarily mean a spot XRP ETF is off the table forever. The crypto landscape is rapidly changing, and regulatory clarity is gradually improving. As the market matures and institutional demand for diverse crypto assets grows, BlackRock, and other major asset managers, might reconsider their position on XRP ETFs.

For now, investors eager for crypto ETF exposure will need to focus on Bitcoin and Ethereum options. However, the underlying strength of the XRP network and its recent market performance suggest that while the ETF path might be delayed, the future for XRP remains dynamic and full of potential.