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Expert Reveals What Will Increase The Odds For A US SEC Approval

Published

2 months ago

October 15, 2024

Xrp Etf Expert Reveals What Will Increase The Odds For A Us Sec Approval.webp.webp

The President of the ETF Store, Nate Geraci, recently revealed what would increase the odds of the US Securities and Exchange Commission (SEC) approving the XRP ETF applications. Asset managers Bitwise and Canary Capital have applied with the Commission to offer this fund, providing institutional investors with exposure to XRP.

What Will Increase The Chances Of An XRP ETF Approval

Nate Geraci mentioned during an interview on the Thinking Crypto podcast that Donald Trump winning the US presidential elections in November will improve the chances of the US SEC approving the XRP ETFs. 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 odds of the market witnessing these XRP ETFs and other crypto ETFs will improve. While he warned that Donald Trump winning the elections doesn’t automatically mean these funds will see the light of day, he noted how the current administration has been hostile towards crypto.

Therefore, this explains why the chances of the ETFs being approved are higher under a potential Donald Trump administration than one led by Kamala Harris. He added that things could be different under Harris’ administration, but her being the Vice President under this current administration suggests that this is unlikely to happen.

This comes amid Kamala Harris finally declaring her support for crypto. However, there was a twist as her campaign promise only focused on protecting black men who invest in and own cryptocurrencies.

Why An Approval Is Still Not Straightforward

Nate Geraci further provided insights into why a US SEC approval of an XRP ETF is still not straightforward even if Donald Trump wins. He noted that there are currently no CME-traded XRP futures contracts. This might be a problem considering that the Spot Bitcoin and Ethereum ETFs came into the market because they both had a CME futures market.

In the Grayscale case against the US SEC, the court ruled that futures and spot markets are correlated. This ultimately forced the SEC to approve the Spot Bitcoin and Ethereum ETFs since they both had a futures market and futures ETFs.

However, that isn’t the case with XRP, which still makes the approval of an XRP ETF dicey. The market expert said he doesn’t believe a futures market is necessary. However, that is how the SEC has operated, which is why there is a need for a regulatory framework if the Commission is to operate any other way.

Meanwhile, Geraci noted that the SEC would also require a surveillance-sharing agreement to approve this fund to curb market manipulation. The issue is that all the exchanges that XRP is currently trading on are unregulated.

In line with this, the ETF Store President believes the best path forward for the whole industry is for Congress to implement a regulatory framework that clearly states which crypto assets aren’t securities and the ones that are.

Despite the crypto industry looking more in support of Donald Trump, Ripple’s co-founder Chris Larsen holds a different opinion. Larsen revealed that his reason for backing Kamala Harris is because of the Vice President’s understanding of the innovation economy.