VanEck’s Head of Digital Asset Research, Matthew Sigel, identifies two factors that could hinder the potential launch of an XRP ETF.
Speaking in a recent interview with Tony Edwards, the host of the Thinking Crypto podcast, Sigel highlighted several factors required for the successful launch of an ETF.
The factors include SEC approval, support from counterparties like exchanges and market makers, issuers’ confidence in the asset’s investment potential, and customer demand.
Solana Meets Criteria for ETF Launch, But XRP Doesn’t
Applying the factors to XRP, Sigel asserted that the Ripple-affiliated coin lacks customer demand and internal conviction. Conversely, he emphasized that Solana (SOL) meets the criteria for a spot ETF.
Hence, VanEck’s head of digital research noted that launching an XRP ETF is less likely compared to Solana. Following the SEC’s approval of Bitcoin and Ethereum ETFs, there has been a debate about which token is next in line for a spot ETF.
Many industry participants identified SOL and XRP as leading candidates to receive the SEC’s approval for such a fund. Recall that weeks after the SEC approved exchange filings for Ethereum ETF, VanEck applied to launch a similar fund for Solana.
Top asset manager 21Shares also filed a request with the SEC to launch a Solana spot ETF. There are speculations that the SEC might deny the application due to the absence of Solana futures. Nonetheless, some people, like Bloomberg ETF analyst Eric Balchunas, believe the fund could be approved under a new U.S. president and SEC leadership.
In the meantime, the SEC considers Solana a security, as seen in its lawsuit against Coinbase and Kraken. Conversely, a federal court declared that while certain XRP-related transactions constitute securities, the token in itself does not.
Despite this, VanEck still believes SOL is more likely to receive the SEC’s approval for a spot ETF than XRP, emphasizing that the latter lacks internal conviction and customer demand—two important factors required for ETF success.
Expert Highlights How to Boost Customer Demand for XRP ETF
Reacting, prominent crypto influencer “Crypto Eri” stated that the community is capable of influencing customer demand for an XRP ETF.
The influencer suggested that boosting customer demand could be achieved through a decentralized governance structure where XRP holders could determine actionable initiatives facilitated by a foundation.
According to Eri, the new decentralized governing structure could help achieve true decentralization and competitiveness within the XRP Ledger (XRPL), thus changing the ecosystem’s perception.
Solana vs #XRP ETF
VanEck's Matthew Sigel with @ThinkingCrypto1
(🙏Tony)
The community wields significant power to shape customer demand. By organizing a collective voice governed by a foundation that directs bold actionable initiatives through a 1:1 vote by holders, this new… pic.twitter.com/2GlpaHWofu— 🌸Crypto Eri 🪝Carpe Diem (@sentosumosaba) July 10, 2024
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