XRP Faces Investor Confidence Crisis Amid Market Cap Decline
Investor confidence in XRP is experiencing a significant downturn, with its market capitalization plummeting by over $16 billion within just a week. This decline is happening alongside a decision by the U.S. Securities Exchange Commission (SEC) to postpone its verdict on the proposed spot XRP exchange-traded fund (ETF) by 21Shares. This delay was detailed in a filing dated May 20.
XRP Market Cap Takes a Hit
Just a week prior, XRP boasted a market capitalization of $153.56 billion. However, as of the latest figures, this has dwindled to $137.45 billion, marking a significant drop of $16.11 billion. The token’s trading price has also suffered, currently sitting at $2.34, which indicates a decrease of nearly 10% over the same timeframe.
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SEC Delays Spot ETF Approval
The SEC announced it would extend the review period for 21Shares’ Core XRP Trust to determine its compliance with Section 6(b)(5) of the Exchange Act. This particular section requires that ETF products incorporate robust measures to prevent fraud and market manipulation.
The proposed ETF is designed to track the CME CF XRP-Dollar Reference Rate and will utilize Coinbase Custody for the secure storage of its underlying assets. Stakeholders now have a window of 21 days to submit their comments and 35 days for rebuttals following this delay.
Bloomberg ETF analyst, James Seyffart, commented that this development was anticipated. He noted that the SEC typically employs a 240-day review period under the 19b-4 filing process, with approvals for spot crypto ETFs unlikely before late June or early July. A more realistic timeline for approval is projected for early Q4 2025.
Anticipated Delays in Spot Crypto ETFs
Delays in the approval process for spot crypto ETFs are not uncommon. Several XRP ETPs have upcoming dates, but early approvals from the SEC are not expected until late June or early July at the earliest, with a more likely timeline in early Q4 2025, according to industry insiders.
Next SEC ETF Decision
As highlighted by Finbold, the SEC is slated to decide on Franklin Templeton’s application for a spot XRP ETF by June 17, 2025. Franklin Templeton, a major asset manager, aims to provide investors with direct exposure to XRP through conventional brokerage accounts. If approved, this could potentially bolster the asset’s price.
Prediction markets, such as Polymarket, have seen a surge in confidence regarding the 2025 approval of a spot XRP ETF, with odds climbing to 83%.
Ripple’s Ongoing Legal Battle with the SEC
This delay in the ETF decision occurs amid ongoing legal proceedings between Ripple and the SEC. Both parties are striving for a resolution, but the case remains unresolved, with further procedural delays complicating the situation.
