Among all the cryptocurrencies in line for approval for spot ETFs in the US, XRP appears to be gaining the most traction.
According to Kaiko, XRP has one of the strongest liquidity levels, which could be the main reason why it is ready for an SEC spot ETF approval.
According to Kaiko’s liquidity rankings, XRP is now beating even Solana with a market depth that is nearly twice that of Cardano.
Another major win for XRP has been its improved standing with regulators, especially with its string of legal victories against the SEC.
22 May is an important date to watch, as the SEC must respond to Grayscale’s spot XRP ETF filing.
The heat around the ETF market has been rising lately, especially with calls for more approvals across more financial products.
Among all the cryptocurrencies in line for approval, XRP appears to be gaining the most traction.
According to a recent report from market data provider Kaiko, XRP has one of the strongest liquidity levels among applicants, alongside increased US trading volume.
Because of this, XRP is uniquely positioned to become the next approved ETF offering, ahead of competitors like Solana, Cardano, and Dogecoin.
Here’s why XRP could be the SEC’s next green light for an ETF, and what this could mean for the crypto markets.
According to the report from Kaiko, XRP has one of the strongest liquidity levels, which could be the main reason why it could be next in line for an SEC spot ETF approval.
In fact, the token’s spot trading volume on US-based exchanges has now hit its highest level since the start of the legal battle between Ripple and the SEC.
XRP leads the market in depth | Source: Kaiko
Liquidity, as it stands, is a major consideration for regulators when it comes to approving ETFs.
Strong liquidity makes sure that an ETF can track its underlying asset properly and offer investors fair prices.
According to Kaiko’s liquidity rankings, XRP is now beating even Solana with a market depth that is nearly twice that of Cardano.
So far, the demand for altcoin-focused ETFs continues to grow, with major asset managers like Grayscale, Bitwise, 21Shares, CoinShares, and Canary Capital all submitting applications for spot XRP ETFs.
Alongside these ETF offerings, there are applications for Solana, Litecoin, Cardano, and Dogecoin-based ETFs.
Interestingly, while Solana is considered to be the next strongest contender after XRP, Kaiko data shows that there has been an ongoing decline in Solana’s U.S. market share.
The cryptocurrency’s market share has so far dropped from a healthy 25–30% range in 2022 to just 16% today.
This could hurt its chances for approval in the short term, giving XRP even more of a lead.
On the other hand, XRP’s U.S. presence is bouncing back with de-listings triggered by the SEC lawsuit bouncing back.
This gives the cryptocurrency a strong case for inclusion in the ETF listings the US already has.
Another major win for XRP has been its improved standing with regulators, especially with its string of legal victories against the SEC.
For example, July 2023 saw Judge Analisa Torres rule that XRP’s programmatic sales to retail investors on exchanges did not qualify as securities sales.
This decision set the precedent for XRP’s wins in court until date, even though at the time, the judge also found that Ripple’s direct institutional sales (worth $728 million) in fact violated securities laws.
To close out the case, Ripple has recently agreed to a $50 million fine, which has done much to clear out the path for more exchange listings and ETF approvals.
In addition, crypto might even be gearing up for a more favorable audience at the SEC, with former SEC commissioner Paul Atkins set to be the agency’s new chair.
The new leader at the SEC and the wave of ETF applications mean that crypto is ready to move from the sidelines to a more visible area of the agency’s agenda.
Overall, 22 May is an important date to watch, as the SEC must respond to Grayscale’s spot XRP ETF filing by this deadline.
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