Analysts are increasingly optimistic about the potential for XRP, the cryptocurrency linked to Ripple, to reach a new all-time high. Altan Tutar, CEO of MoreMarkets, a liquidity marketplace, has projected that XRP could surge by 73% by the end of the year, driven by a rise in demand stemming from recently launched altcoin exchange-traded funds (ETFs).
Tutar noted that XRP has already managed to reclaim its $3 price point following the recent introduction of an XRP ETF by Rex-Osprey, which coincided with the launch of a Dogecoin ETF. Both of these funds are designed to provide spot exposure to their respective digital assets. However, despite this bullish outlook, Tutar expressed a degree of caution regarding the broader crypto market’s reaction, which has remained subdued even after the Federal Reserve cut interest rates and the creation of new XRP and Dogecoin ETFs.
Angie Malltezi, COO at Altius Labs, provided another layer of perspective, cautioning that while the initial launch of the ETFs generated excitement, institutional interest in these products remains limited. She emphasized that the ETF structure alone does not create demand; rather, it amplifies existing demand. For context, Malltezi highlighted the stark difference in daily trading volumes—Bitcoin sees between $25 billion and $30 billion, while combined, XRP and Dogecoin generate less than $1 billion. This discrepancy illustrates the challenges facing altcoin ETFs, particularly in the absence of robust derivatives markets and widespread adoption narratives.
Moreover, the newly launched Rex-Osprey ETFs are not structured as pure spot ETFs similar to those for Bitcoin and Ethereum. Instead, they utilize a regulatory workaround via the Investment Company Act of 1940, which allows for translations into ETF formats without subjecting issuers to the longer approval timelines instructed under the 1933 Securities Act. However, this comes with the compromise of tighter marketing restrictions and limited distribution capabilities compared to their more established counterparts.
Looking ahead, October is poised to be a pivotal month for the altcoin ETF landscape as the SEC is expected to finalize its decisions on a series of pending applications for pure spot altcoin ETFs. In a significant regulatory shift, SEC Chair Paul Atkins has initiated a fast-track approval process that shortens the ETF approval timeline from 240 days to just 75 days for funds meeting basic criteria, like those with futures contracts on regulated U.S. exchanges.
The introduction of new crypto ETFs is being hailed as an important step toward enhanced regulatory clarity in the investment landscape. Jianing Wu, an analyst at Galaxy Research, cautioned, however, that inflows into altcoin ETFs will be heavily influenced by market sentiment. Wu pointed out the modest uptake of U.S. spot Bitcoin ETFs, which attracted flows equivalent to just 0.8% of Bitcoin’s market value within their first three months, contrasted with Ethereum ETFs that actually experienced net outflows during the same timeframe. For Canadian Solana ETFs, an estimated $298 million has flowed in since April, equating to approximately 0.2% of its market cap.
In light of this context, analysts like Wu anticipate that XRP and Dogecoin ETFs may experience modest inflows, particularly given their higher risk profiles. Additionally, Lucas Tcheyan from Galaxy noted that the rapid evolution of the crypto market structure, evidenced by the expediency of ETF approvals, indicates a shifting dynamic that could lead to increased demand in the future, particularly from treasury companies investing in decentralized finance (DeFi) solutions.
