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XRP has developed Ripple to standardize operations in the company’s payment network.
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The XRP has recently reached a new record because of Ripple and the Securities and Exchange Commission (SEC) agreed to agree on its five -year legal struggle.
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The SEC is again in the spotlight as investors are eagerly awaiting the possible approval of the first fund traded by the Squot XRP.
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10 shares we like better than XRP ›
XRP (Crypto: XRP) It is the third largest cryptocurrency in the world and, unlike many of its peers, has a legitimate use in the real world. It is designed to serve as a currency in the Ripple Ripple Payment Network, which means that it helps financial institutions instantly send money worldwide, very low costs.
US Securities and Exchange Commission (SEC) 2020 Filed a lawsuit against Ripple for alleged violations of financial securities laws, which caused XRP to suppress for many years. However, both parties officially resolved the case in August, which helped the Catapult token to reach a new record.
However, the horizon can be new upside down. The SEC is expected to be until October 18th. Will confirm the first Spot XRP Exchange Fund (ETF) to send billions of dollars flowing to cryptocurrency. Should investors buy it before the deadline?
Cryptocurrencies are essentially risky not only because of their volatility, but also because digital wallets are not very safe. Burnings and even inappropriate powers can cause irreparable losses, so financial advisors and institutional investors are usually unable to buy cryptocurrencies directly. It leaves a bunch of money sitting away.
The purchase of a Spot ETF can be a safer way to participate in these markets because they are supervised by regulatory authorities and offer protection for investors. They concentrate on investors’ funds and directly buy the specified cryptocurrency, offering a return on the annual fee, which can range from 0.15% to 1.50% of the total fund assets.
First place Bitcoin (Crypto: BTC) ETF was approved in 2024. January And now they manage $ 150 billion assets together. Since then, Bitcoin has grown 167%, and that revenue is a major reason for why.
It is not surprising, therefore, that investors are worried about the idea of Spot XRP ETF. Seven different providers are waiting to hear from the SEC, but Gyycale, which already owns two Bitcoin Etf, has the earliest time limit for solution (October 18).
There is a chance that many Spot XRP ETFs will be approved much earlier thanks to new generic lists (GLS) recently accepted by the SEC. These new rules simplify the approval process for ETFs, who want to invest in goods and digital assets.
Bitcoin has taken advantage of the start of a Spot Etf as many investors have already considered cryptocurrency as a legitimate value storage. It is completely decentralized, which means that no person, company or government can be controlled, with a total of 21 million coins, which creates a perception of a defect.
On the other hand, the XRP has developed Ripple, so it is a centralized cryptocurrency. The SEC lawsuit proved that the value of the XRP is very related to the fate of the company, which is a risk investor.
In addition, Ripple still controls about 40 billion XRP tokens, which it gradually dismisses to satisfy the demand for financial institutions. As a result, XRP circulation will continue to increase, but its hard cap is 100 billion tokens that cannot be replaced.
Depending on those points, the Spot ETF can be useful for XRP as they were useful for Bitcoin. Financial advisers and institutional investors wanted to To have Bitcoin, so the ETF has filled an important gap in the market, but the same cannot be said for XRP.
As I mentioned earlier, XRP plays a real role in Ripple payments. The network is designed to help banks directly and instantly arrange cross -border operations with each other, no matter what existing infrastructure they use and XRP can standardize those operations.
For example, the American Bank can send XRP to Japanese bank instead of sending US dollars, which reduces expensive foreign exchange taxes. Transmission with XRP would cost only 0.00001 tokens or part of a single US pen. However, Ripple payments support the Fiat currency and the company has also started its Stablecoin called Stablecoin Ripple USD (Crypto: rlusd) Last year.
This means that the use of XRP is optional, so the success of the network does not necessarily mean a higher price than the token. In addition, Ripple USD can be better suited for operations through Ripple payments, as Stablecoins are virtually no volatility. On the other hand, the XRP is very unstable, making banks a major change in value when they follow chips.
If the XRP value is not directly linked to payments, at the same time, investors do not consider it as a legitimate value storage, such as Bitcoin, then I am not sure that there will be high ETF demand. Therefore, it may be that October 18th. However, the date will not be important.
Given the gloomy XRP bases, I think it can be a better idea to completely avoid the token.
Consider this before buying XRP:
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Anthony di Pysio has no position in any of the above shares. Motley fool is a position and recommends Bitcoin and XRP. The Motley fool has a disclosure policy.
Should you buy XRP (Ripple) until October 18th? initially released by The Motley Fool
