NOIDA (CoinChapter.com) — Is an XRP ETF at Risk? In a letter to the US Securities and Exchange Commission, Democratic US senators Jack Reed and Laphonza Butler formally requested the regulatory body to reconsider its stance on further crypto exchange-traded products (ETPs). The senators specifically targeted any ETPs or ETFs not associated with Bitcoin.
Does this mean that Ripple’s victories over the SEC have become a thing of the past for crypto traders? The question on every XRP bull’s mind is when some firm will launch an XRP ETF. However, with the US senators’ request, it seems that the road might have some unforeseen speed bumps.
If the SEC takes heed of the senators’ request, the XRP ETF would be at risk. Traders and analysts had high hopes for an XRP investment vehicle, with Martin Hiesboeck, research head at Uphold Inc., commenting that “An XRP ETF is around the corner.”
Ripple CEO Brad Garlinghouse had also hinted at an XRP ETF, but with lawmakers now seemingly against all altcoin ETFs, it might be an uphill task for Ripple or investment firms to introduce one.
What The US Senators Said – XRP ETF at Risk?
The senators claimed their request arose from concerns for investors’ safety, stating that ETPs exposed the general public to the “volatile cryptocurrency” markets.
The senators called for rigorous oversight of broker and adviser communications concerning bitcoin ETPs to safeguard investor interests.
Moreover, the lawmakers urged the SEC to “carefully scrutinize brokers’ and advisers’ communications regarding bitcoin ETPs,” claiming brokers were regularly violating fair disclosure rules.
Moreover, Reed and Butler advised caution against setting a precedent with the recent ETP approvals.
“While the bitcoin market has displayed serious weaknesses, it is nonetheless far more established… markets for other cryptocurrencies are far more exposed to misconduct. We do not believe that other cryptocurrencies show the trading volumes or integrity to support associated ETPs.”
The senators wrote in their letter.
The senators voiced strong opposition to endorsing ETPs linked to other, less established cryptocurrencies and those vulnerable to market manipulation. As such, the senators’ opposition could hinder the chances of an XRP or even an ETH ETF now.
Crypto Community’s Response
Several experts shared their responses to the senators’ letter, with some offering counter-arguments in favor of ETFs. Bloomberg ETF expert Eric Balchunas highlighted that the senators’ use of some technical jargon was surprising, given that they lacked the skill set to perform such an analysis.
“Bc we pretty sure these two senators are prob not doing deep Corr studies. Poss they fed a study SEC has that they going to use in rejection ? Seems foreshadowy at very least [sic]”
Balchunas wrote in a post
Another Bloomberg analyst, James Seyffart, also noted the discrepancy between the senators’ financial knowledge and the analysis in the letter. Seyffart claimed, “There’s almost zero chance these senators did the analysis themselves.”
Coinbase chief legal officer Paul Grewal also joined the discussion, claiming that existing evidence was enough to negate the senators’ objections against an ETH, XRP, or other altcoin ETF. Grewal highlighted that they had already sent a 27-page letter to the SEC supporting the approval of an ETH ETP.
XRP Bulls Ignore Senators’ ETF Letter
Despite news of the senators requesting the SEC hold off on altcoin ETPs/ETFs, XRP bulls remained unfazed about XRP’s chances of ETF. Independent crypto analyst Jack The Rippler highlighted a Forbes story predicting a $9 trillion influx in XRP markets if Blackrock XRP ETF gets SEC approval.
Other traders shared posts predicting the launch of an XRP ETF soon. Moreover, bulls remained strong, helping XRP price recover after a 12% plunge to a daily low near $0.59 on March 15.
XRP price is reeling from a massive correction, that saw the token drop over 21% since March 11’s high near $0.75. If the XRP ETF news does not impact investor sentiment, bulls might continue pushing the token higher, resulting in XRP price rallying to the resistance near $0.64.
Breaking past the immediate support might help XRP price target the resistance near $.674 before retreating.
On the other hand, any news of delay in the ETH ETF could impact XRP too, resulting in a sell-off that could see the token drop to the support near $0.6. Moreover, breaching the immediate support would force XRP price to test the support near $0.575.
The RSI for XRP remained neutral, with a score of 50.89 on the daily charts.
