Bloomberg Intelligence Analyst Unveils Prerequisites for XRP ETF Approval

James Seyffart, a prominent ETF research analyst at Bloomberg Intelligence, has pointed out the prerequisites that must be in place before an XRP exchange-traded fund (ETF) can come to fruition.

Seyffart’s comment on the subject came during a recent edition of Coinbase’s weekly podcast, which centers on the Institutional Market Call.

The hosts highlighted the increasing discourse surrounding the digital asset that could potentially have an ETF following Bitcoin. In particular, they inquired about the prospects for XRP, considering its established regulatory status in the United States.

XRP ETF: Not Anytime Soon

James Seyffart indicated that the short answer is “not anytime soon.” However, he acknowledged that the ongoing SEC vs. Ripple court case could potentially position XRP as the next digital asset to have an ETF.

An XRP enthusiast called attention to Seyffart’s remarks in a recent post on X.

#XRP ETF Not Anytime Soon but Theoretically Next. #Coinbase Institutional Call A/ #Bloomberg Intelligence. pic.twitter.com/znqZ1v5lp8

— 707Crypto (@707_crypto) January 12, 2024

XRP Needs CFTC Futures Regulated Market

Furthermore, he outlined the current regulatory template, noting the necessity of a federally regulated futures market for XRP. Specifically, he pinpointed the Chicago Mercantile Exchange (CME) under the U.S. CFTC’s regulation.

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Seyffart noted that only Bitcoin and Ethereum have such regulated futures markets. As a result, prominent asset managers have moved to established ETFs for only Bitcoin and Ethereum.

In this context, Seyffart stressed the importance of a CME Futures Market and possibly a Futures ETF for XRP. He speculated that the SEC might require a futures ETF or allow direct spot trading for the asset.

However, the Bloomberg analyst remained skeptical about the latter option in the current regulatory landscape. 

Moreover, Seyffart suggested that a literal act of U.S. Congress might be needed to address the market structure for other assets apart from Bitcoin and Ethereum.

He highlighted the ongoing SEC court cases involving Coinbase, Kraken, and others, expressing the need to monitor how these cases would influence the classification of digital assets as securities. 

Nonetheless, despite potential positive outcomes from the court case, the Bloomberg analyst remained doubtful about the SEC’s approval of an XRP ETF in the near future. He cited concerns about XRP still being classified as a security by the SEC.