XRP ETF Approval: $800M Inflows on the Horizon or Just a Pipe Dream?

The anticipation around potential spot XRP exchange-traded funds (ETFs) is reaching fever pitch, with projections suggesting up to $800 million in inflows within the first week of trading—if they get the green light. But will the Securities and Exchange Commission (SEC) actually approve these investment vehicles?

Massive Inflows Expected—If Approved

According to Luca Sorlini, head of products at Northstake, XRP ETFs could see between $400 million and $800 million in initial inflows, based on patterns observed with Bitcoin and Ethereum ETFs. Similarly, Gabe Selby of CF Benchmarks predicts first-month flows reaching nine figures, while JPMorgan estimates a staggering $4 billion to $8 billion in net new assets within the first six to twelve months.

SEC acknowledgment of applications from Grayscale and 21Shares recently fueled speculation, triggering a 16% XRP price surge. However, acknowledgment doesn’t mean approval. Previous attempts at launching altcoin ETFs were swiftly dismissed, making the final decision uncertain.

BitGalactic Take: Will XRP Follow Bitcoin’s Path?

BitGalactic analysts note that Bitcoin ETFs were initially met with regulatory resistance, only to be approved after a strong push from institutional investors. With Trump signaling a more crypto-friendly stance, XRP’s ETF prospects could benefit from political shifts.

However, one key hurdle remains: while Bitcoin and Ethereum had established futures markets on the CME before their ETF approvals, no such infrastructure exists for XRP. Could regulatory standards shift to accommodate it?

Trump Factor and Ripple’s Legal Battle

Market sentiment is shifting as Trump’s pro-crypto stance gains traction. His administration’s deregulatory approach has fueled optimism, with Bloomberg analysts assigning a 65% chance for SEC approval and Polymarket betting markets placing odds at 78% for 2025.

A lingering concern, however, is Ripple’s unresolved legal battle with the SEC. Although a judge ruled XRP is not a security, the SEC appealed, leaving some uncertainty about its classification. If the case concludes favorably, it could remove a major barrier to approval.

Potential Market Impact

Historically, ETF approvals have been bullish for crypto prices. Bitcoin skyrocketed 150% after its spot ETF was approved in January 2024. If XRP follows suit, a massive rally could be on the horizon.

Yet, there’s still the question of whether the SEC will approve a single XRP ETF first or multiple simultaneously, as it did with Bitcoin ETFs. With the agency under new leadership, past trends may not apply.

Final Verdict: Optimism With Caution

While the momentum behind XRP ETFs is undeniable, approval is far from guaranteed. The lack of a futures market, ongoing regulatory scrutiny, and the SEC’s unpredictable approach to digital assets all pose significant challenges.

BitGalactic’s assessment? Keep an eye on the legal landscape and evolving regulatory policies. If history is any indicator, institutional pressure and political shifts could tilt the odds in XRP’s favor—but until then, traders should brace for volatility.