Prominent Bloomberg ETF analyst James Seyffart says XRP will have to trade on CME derivative exchange before SEC can approve XRP ETF.
In a recent edition of Tony Edward’s Thinking Crypto Podcast, Bloomberg ETF analyst James shed light on the possibility of an XRP exchange-traded fund (ETF).
Particularly, Seyffart highlights conditions that must be met before the crypto community can see an XRP ETF come to fruition.
Is a #XRP Spot ETF REALLY Possible After the #Ripple vs #SEC Case?
James Seyffart of Bloomberg explains.
Watch the full interview https://t.co/or43ErhS6i#crypto #bitcoin #etf #blacktock #bitcoinetf #cryptocurrency @ThinkCryptoPod pic.twitter.com/ED2LVsFHQs
— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) August 14, 2023
CME Listing XRP
Seyffart argued that Chicago Mercantile Exchange (CME), a prominent derivative exchange, would have to list XRP futures to set the ground for an ETF approval. The analyst expressed that CME listing XRP futures contracts will allow the US regulator to easily approve an XRP futures ETF.
This requirement is crucial as the ETF would need an underlying asset to track, with XRP on the derivative exchange filling that gap. Seyffart further mentioned the unlikelihood of the crypto community seeing a Ripple spot ETF.
In his words:
“First of all, CME would have to list XRP futures before a futures ETF would launch. And I can’t imagine them allowing a spot Ripple ETF anytime soon.”
Congress Needs to Come in
Notably, this view from the ETF analyst comes after he noted earlier that the Securities and Exchange Commission (SEC) cannot approve an XRP ETF.
As The Crypto Basic reported, the basis of Seyffart’s argument was that the current regulatory framework cannot accommodate an XRP ETF. He further buttressed this point in the podcast.
The Bloomberg analyst noted that the back and forths will linger unless the US Congress issues laws specific to cryptocurrencies. He remarked:
“Basically what it needs to happen and we keep going back, we need clarity. Congress needs to come in and issue laws.”
Chiefly, laws providing clarity for crypto make it easier for exchanges like CME to list XRP futures for the ultimate SEC ETF approval.
Meanwhile, Seyffart has also mentioned that there is practically zero demand for an XRP exchange-traded fund. Given no demand, ETF issuers are also unmotivated to make an XRP ETF move.