SEC Puts XRP-Linked ETFs on Ice Despite Greenlighting Solana Fund
XRP and crypto-spot ETFs took center stage as investors await the SEC’s ETF framework/listing standards. The SEC approved the Bitwise 10 Crypto Index Fund’s (BITW) conversion into an ETF. However, the agency also issued a stay order, preventing the ETF’s launch.
BITW will provide investors exposure to BTC and leading cryptocurrencies, including ETH, XRP, SOL, ADA, SUI, LINK, AVAX, LTC, and DOT. As of July 21, XRP accounted for 6.7% of the fund’s holdings, ranking #3 behind BTC (73.2%) and ETH (14.2%).
However, the launch delay adds to uncertainty over the timeline for launching an XRP-spot ETF, weighing on XRP demand.
Earlier this month, the SEC approved the rule change for the Grayscale Digital Large Cap Fund to convert into the Grayscale Digital Large Cap ETF (GDLC). GDLC invests in BTC, ETH, ADA, SOL, and XRP.
ETF Store President Nate Geraci remarked on the SEC’s stay orders, stating:
“SEC Division of Trading & Markets has *approved* the Bitwise 10 Crypto Index ETF… However, like with the Grayscale Digital Large Cap ETF, this approval order is stayed. IMO, both of these should be allowed to convert/uplist asap. Bizarre situation.”
Notably, the SEC issued the stay order despite allowing the Rex Osprey Solana (SOL) ETF to launch on July 2, after GDLC’s approval and stay order.
One common factor between GDLC and BITW is XRP. It is unclear if the SEC is delaying the launch of crypto-spot ETFs with XRP exposure until the conclusion of the Ripple case, given the recent launch of the SOL-spot ETF.
Will the SEC Vote to Drop the Appeal and Fast Track XRP-Spot ETF Approvals?
Investors await an SEC vote on whether to drop its appeal against the 2023 Programmatic Sales of XRP ruling. The agency had previously agreed to withdraw its appeal on the basis that Ripple dropped its cross-appeal under agreed settlement terms. However, Judge Analisa Torres rejected the motion for an indicative ruling, meaning the SEC must now formally vote on dropping the appeal despite the prior agreement.
A closed meeting on Thursday, July 24, could allow SEC Chair Paul Atkins and the Commissioners to vote. However, the agenda for the meeting is private, leaving investors in the dark on the timing of a vote.
Legal experts believe the SEC will vote in favor of dropping the appeal, given its willingness to withdraw on a favorable ruling on the settlement terms. However, crypto-spot ETFs with XRP exposure and XRP-spot ETFs could remain on ice until a formal motion to drop the appeal. This could limit XRP’s upside given the effects of sustained demand for BTC, ETH, and SOL-spot ETFs on their price trajectories.
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See all Bitcoin forecastsXRP Price Outlook: the SEC Appeal Vote, and ETF Headlines
XRP slipped 0.03% on Tuesday, July 22, following Monday’s 2.8% gain and closing at $3.5517. The token underperformed the broader crypto market, which climbed 1.61%, taking the total crypto market cap to $3.92 trillion.
XRP’s near-term price trajectory hinges on the SEC’s appeal vote and US XRP-spot ETF-related developments.
A breakout above the July 18 all-time high of $3.6629 could bring the $4 level into view. A sustained move above $4 may enable the bulls to target the $5 mark. Conversely, a break below $3.4 could expose the $3 level.
Explore our full XRP forecast here for key breakout zones and timing insights.
BTC Rallies on JPMorgan News and Institutional Demand
While XRP hovered after crypto-spot ETF developments, bitcoin (BTC) revisited $120,000 for the first time in four sessions. Reports of US banking giant JPMorgan (JPM) allowing clients to borrow against bitcoin and ethereum holdings sent BTC to session highs. The bank will reportedly begin allowing crypto-backed loans next year.
The news is significant considering JPMorgan CEO Jamie Dimon’s long-term anti-crypto stance. In December 2023, Dimon delivered an anti-crypto tirade during a Banking, Housing, and Urban Affairs Committee hearing, concluding:
“If I was the government, I would close it down.”
Increasing institutional demand also contributed to the positive sentiment, offsetting BTC-spot ETF outflows. On Monday, July 21, news broke of Trump media reporting BTC and bitcoin-related securities holdings equivalent to around $2 billion. Crypto America host and journalist Eleanor Terrett remarked:
“Trump Media now says it holds around $2 billion in BTC and bitcoin-related securities—about 2/3 of its $3B in liquid assets—as part of its previously announced treasury strategy.”
US BTC-Spot ETF Market Inflow Streak Snaps
BTC advanced for a second session despite the US BTC-spot ETF market snapping a 12-day inflow streak on July 21. Total inflows reached $6,113.1 million over the 12 days. US BTC-spot ETF issuers faced a second day of outflows on July 22. According to Farside Investors, key flows for July 22 included:
- Bitwise Bitcoin ETF (BITB) had net outflows of $42.3 million.
- ARK 21Shares Bitcoin ETF (ARKB) reported net outflows of $33.2 million.
- Meanwhile, Grayscale Bitcoin Trust (GBTC) saw net inflows of $7.5 million.
With BlackRock (BLK) iShares Bitcoin Trust (IBIT) flow data pending, total US BTC-spot ETF outflows reached $68 million.
BTC Price Outlook: CLARITY Act, Working Group Report, and Spot ETF Flows in Focus
BTC rallied 2.2% on July 22, following Monday’s 0.13% gain and closing at $119,980.
The near-term price trajectory hinges on several key drivers. These include the CLARITY Act’s progress on Capitol Hill, Strategic Reserve Asset-related developments, and spot ETF flow trends.
Potential scenarios:
- Bearish Scenario: Legislation roadblocks, US government silence on building its BTC stockpile, hawkish Fed signals, and ETF outflows. A combination of these may push BTC toward $115,000, potentially exposing the 50-day Exponential Moving Average (EMA).
- Bullish Scenario: CLARITY Act’s progress, calls to increase the US government’s BTC holdings, dovish Fed signals, and ETF inflows. Under these scenarios, BTC could target the all-time high of $122,057.
What to Watch
Investors should closely track the key drivers, which may determine whether XRP and BTC can hit new record highs. These include:
- Ripple case updates: Pending SEC appeal vote.
- US Presidential Working Group Report: Recommendations for crypto stockpiling.
- Legislative developments: The CLARITY Act’s progress on Capitol Hill.
- Fed guidance: Hawkish or dovish signals.
- ETF market flows: Flow trends crucial for BTC’s supply-demand balance.
See where analysts expect XRP and BTC to head as legal and political risks evolve.
