Ripple's XRP (XRP +2.32%) has had an extraordinary year. Not only has the project shaken off years of legal battles with the Securities and Exchange Commission (SEC), but Sept. 18 saw the launch of the first U.S. spot XRP ETF, the REX-Osprey XRP ETF (XRPR +1.69%).The fund will likely be the first of many. Even before the Securities and Exchange Commission announced a new streamlined ETF approval process, there were already seven XRP ETFs in the pipeline.
Spot crypto ETFs make it easier for retail and institutional investors to add cryptocurrency to their portfolios, which can have a positive impact on prices. But as we will discuss, there are no guarantees. ETF approval opens the door, but there needs to be a solid investment case for institutions to pile in.
Here are three reasons XRP may not take off when more spot ETFs get approved.
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1. XRP ETF gains may already be priced in
XRP has gained more than 400% during the past year (as of Sept. 24). The expectation that a new pro-crypto administration would bring Ripple Labs, the company that issues XRP, out of legal purgatory and ultimately approve a spot ETF played a large part in that surge. But -- as is often the case in the crypto world -- the rally happened before the news broke that the SEC had ended its lawsuit against Ripple. The crypto actually fell in the weeks after the company and the SEC announced the end of their legal dispute over whether XRP is a security.
XRP's price has also dropped since the Rex-Osprey ETF started trading, despite significant trading volumes. Bloomberg's Eric Balchunas posted on X (formerly Twitter) that the fund traded $37.7 million on day one -- the highest first-day volume in 2025 so far. The slump probably has more to do with a broader drop in crypto prices than XRP-specific factors. But it also shows that, to some extent, the market had already priced in the expected ETF approvals.
CRYPTO: XRP
Key Data Points
2. The times, they are a-changin'
Cryptocurrency remains a relatively new asset class, which is why it's important to ensure it only makes up a small percentage of your portfolio. Unfortunately, it also means we only have a limited number of reference points to understand how multiple spot ETF approvals might affect specific cryptos. This hasn't happened before.
We do know that Bitcoin's (BTC +2.95%) price started to rally just weeks after spot ETFs were approved last January. Per CoinGlass, there's now more than $150 billion in spot Bitcoin ETFs. That influx of cash has been a key factor in driving the biggest crypto to record highs this year.
The first spot Ethereum (ETH +3.72%) ETFs tell a different story. They got the green light in May 2024 and launched a few months later. Ethereum's price saw a sustained dip in the months after. Indeed, it only pushed to a new high more than a year later on the back of optimism about Ethereum's role in the growing stablecoin and decentralized finance sectors.
The crypto market tumbled to start this week as investors reacted to wider economic concerns. If that risk-off mood continues, it may damp any enthusiasm for new altcoin ETFs. It's also hard to know how the XRP ETFs might fare in comparison with the 80 or 90 other crypto ETFs that the SEC might approve. That may include ETFs with staking rewards and multi-crypto funds.
3. Ripple needs to deliver
Ultimately, ETFs are only as good as the assets inside the funds. And that means putting XRP under the spotlight. It is a solid cryptocurrency project that's weathered the SEC courtroom salvos, but it is operating in an extremely competitive industry. There are a lot of players, both traditional and new, trying to take a piece of the payments pie and the incumbents won't move aside easily.
For example, one key use of XRP is as a bridge currency to make cross-border payments cheaper and faster for banks and businesses. Ripple Chief Executive Officer Brad Garlinghouse told an event this summer that XRP could take as much as 14% of transaction volumes from the legacy Swift network, which dominates the international institutional transfer sector right now. But that may not be as easy as it sounds. Particularly as Swift is working with Chainlink (LINK +3.07%) to develop its own blockchain solutions.
Ripple could also take some of the global international remittance market, which Allied Market Research estimates will surpass $1.3 trillion by 2032. Its real-world asset tokenization platform and stablecoin solutions could prove valuable as institutions grapple with ways to record digital ownership.
There's certainly a lot of potential. But I'd like to see more certainty for a cryptocurrency that already has a market cap of more than $175 billion. For context, if it were a company it would be about the same size as Charles Schwab or BlackRock.
ETF approval alone won't drive price action
XRP is an exciting cryptocurrency that delivers real-world value, and that alone sets it apart from many other digital currency projects. But it needs more than ETF approval to achieve another breakout. It's all about adoption and showing that it can keep its place at the global money transfer table.
