A prominent figure in the XRP community has argued that the outlook of an XRP exchange-traded fund (ETF) will remain elusive until a pivotal development surfaces.
Pro-XRP crypto influencer WrathofKahneman (WoK) took to X to share this sentiment. The context of his observation was the impact of crypto exchange-traded funds (ETFs) set to debut in 2024.
It is worth mentioning that the U.S. regulator must decide on pending Bitcoin spot ETF applications in the first week of this new year.
According to WoK, the arrival of crypto ETFs is poised to usher in a new era of market volatility driven by a confluence of factors.
WoK first consented that crypto ETFs will see institutional funds entering the crypto space, predicting their influx would play a pivotal role in shaping the market.
Specifically, the analyst highlighted the likelihood of heightened volatility. In his words, “Crypto ETFs in 2024 mean volatility.”
He attributed it not solely to the substantial influx of institutional capital but also to the emergence of arbitrage opportunities between the ETF and the underlying cryptocurrency assets.
Furthermore, Wok pointed out the scarcity of companies housing ETF and crypto operations under a single roof. According to the analyst, this separation may intensify arbitrage opportunities, as investors look to capitalize on price differentials.
In this context, WoK alluded to the cautious approach that might be taken with certain cryptocurrency ETFs like XRP.
Before XRP ETF Can Materialize
Specifically, WoK suggested that the legal case involving XRP could delay or hinder the introduction of XRP spot exchange-traded funds. In other words, the analyst believes until the SEC’s lawsuit against Ripple settles, the chances of an XRP ETF remain slim.
A few months ago, an ETF analyst at Bloomberg underscored the importance of incorporating XRP into a derivative platform as a prerequisite for the potential development of an XRP ETF.
The Bloomberg analyst suggested that having XRP futures listed on the Chicago Mercantile Exchange (CME) could lay the groundwork for the eventual authorization of an XRP ETF.