By Michael Scott
A leading figure in the XRP community, Chad Steingraber, considers spot exchange-traded funds (ETFs) as harbouring game-changing potential. The professional game designer iterated that approving the spot ETFs could trigger an institutional run on crypto assets such as XRP.
In a Thursday, November 24 tweet, Steingraber shed light on the immense potential that spots ETFs. He observed that they feature physical backing, implying the need for the fund to buy and hold the respective asset. Often, they would not trade the underlying asset onto the public; instead, they would accumulate it to increase the value.
The professional game designer’s remarks coincide with the growing anticipation of the Wall Street Firms filing for XRP ETF filing. Steingraber considers the spot ETFs to harbour the game-changing potential for their unique characteristics.
XRP ETF Filing Likely to Trigger Unstoppable Institutional Run
Steingraber noted that, unlike conventional investment vehicles, spot ETFs have physical backing. As such, it compels the investment fund to acquire, accumulate and retain the underlying asset tracked by the spot ETF.
Steingraber elaborated that extending the ETF filing to Ripple’s native XRP token would trigger an institutional run. Such would arise since the investment fund gradually accumulates to enhance its value. Doing so stems from the awareness that spot ETFs involve infrequent trades of the underlying asset.
The EXP enthusiast observed that the same rule applies to Bitcoin and Ethereum spot ETFs whose applications are pending approval before the Securities and Exchange Commission (SEC). He warns that hoarding is inevitable since more asset managers would embrace the spot ETFs.
Steingraber remarks show that accumulating the underlying asset would strangle supply simultaneously with surging demand. Applying the basic economic principle indicates that hoarding would invariably propel the asset’s value, with prices realizing unprecedented high levels.
The XRP community figure detailed that once the Gary Gensler-chaired SEC approves the spot ETFs, there would be no reversal to close the gates. Steingraber suggests that such would trigger an irreversible institutional run towards digital assets, a phenomenon that would unfold since every financial institution would join the fray.
Spot ETF approval appears imminent, with the US securities regulator involved in talks with Grayscale Bitcoin Trust (GBTC) and BlackRock’s representatives in the past week. The meeting is a positive signal from the previous stance by the SEC to dismiss applications for Bitcoin spot ETF.
Applications for XRP ETF Inevitable
In its recent activity, Fink’sLarry BlackRock has applied for a spot in Ethereum ETF. The anticipation of spot ETF approval is fuelling the rally experienced across the crypto market.
Besides the wait for a spot ETF for Bitcoin and Ethereum, the crypto community’s eyes remain focused on the likely introduction of XRP spot ETF. Market observers agree that XRP has a better regulatory position than the two leading cryptocurrencies, Bitcoin and Ethereum.
Earlier this month, the XRP realized a wild, short-lived spike following the publication of a bogus XRP ETF application by the crypto news platform Cointelegraph. Events prompted the Department of Justice (DoJ) to initiate investigations.
Meanwhile, the US crypto community has heightened hopes of XRP ETF following news that DeFi Technologies is set to unveil the product in Europe via its subsidiary Valour Inc. next month. The Canada-based blockchain company disclosed in its Wednesday, November 22 statement that the Ripple ETP will serve the growing demand for diverse cryptocurrency exposure among European investors.