Ripple’s XRP cryptocurrency is set for turbulent times as a slew of spot exchange-traded funds (ETFs) based on the token are likely to get the green light in the coming weeks.
On its 18 Sept debut, the REX-Osprey XRP ETF, trading under the ticker symbol XRPR, closed at $25.73. But after an initial surge, it fell to $23.33 by 22 Sept, and is trading at $19.89 as of 15 Oct. The underlying XRPs went from $3.08 on 18 Sept to about $2.41.
XRP is the token used on the XRP Ledger, a network built for payments. ETFs give investors access to it through traditional stock exchanges, without having to directly own, store, or manage the digital asset. This opens it up to a broader public familiar with trading stocks and ETFs. REX-Osprey’s was the first such product to offer spot XRP exposure in the US.
New rules for ETFs
Spot XRP ETFs are already a market feature in Canada and Europe. But their arrival in the US has been held back by a time-consuming rule requiring listing approval for every individual fund. Last month, the US Securities and Exchange Commission (SEC) lifted that requirement, known as Rule 19b-4, and now only has to clear a candidate fund’s prospectus.
According to Bloomberg Intelligence, the SEC is set to rule on listing applications of funds from Grayscale, 21Shares, Bitwise, Canary, WisdomTree, CoinShares, and Franklin in the coming weeks. Approvals are highly likely, Bloomberg analyst Eric Balchunas said in a 29 Sept post on X. “The baby could come any day. Be ready.”
What remains to be seen is the effect on XRP prices once the new funds come online. If previous experience with Bitcoin (BTC) and Ether (ETH) is any indication, they could be in for a rough ride. Both coins saw double-digit drops immediately upon the market debut of their funds and took weeks to months to recover to pre-ETF approval levels.
Most Bitcoin ETFs made their market debut on 11 Jan 2024. In the week that followed, the coin fell by over 11 percent, while BlackRock’s newly-released IBIT fund lost 16 percent. By March, however, Bitcoin saw a near two-fold rally, rising to $73,000, with IBIT seeing similar returns.
When Ether funds were released on the market in July 2024, ETH fell over 30 percent in the weeks thereafter. BlackRock’s ETHA fell almost 40 percent. ETH and its ETFs took nearly three months to recover to the pre-launch level of about $3,400.
Reasons for the price falls
Still, the underlying reason for the drops in Bitcoin and ETH were different from what is at play in the case of XRP. Those declines were mainly driven by the unwinding of trusts based on the two cryptocurrencies. These investment vehicles would offer exposure to the coins, but the price of the trust’s shares would often diverge from the market value of the underlying coins. This occurred because trusts, unlike ETFs, do not have the mechanism, known as “creation and redemption,” that keeps the value of ETF shares close to the value of the underlying asset.
According to a Reuters report at the time, a handful of hedge funds bought Bitcoin trust shares at prices sometimes 50 percent below market value, held them until Bitcoin ETFs were approved in 2024, and cashed out. Nearly $12 billion exited Grayscale Bitcoin Trust (GBTC), the largest trust at the time, in just two months following the trust’s ETF conversion, which equated to roughly a fifth of the converted fund’s managed assets by mid-March, according to data from Bloomberg and CoinGlass. This prompted mass sales of actual Bitcoin. The same happened to Ether in July 2024.
By contrast, XRP doesn’t have a large, long-running trust market, so this specific source of selling pressure is less likely. But there are other reasons the price could wobble on launch day. With approvals widely expected, some buyers may already have built positions in XRP and take their profits as soon as the tickers appear. Access also rolls out in stages: some brokers and platforms take weeks to switch on new funds, so inflows can start more slowly than news headlines suggest. If the broader market turns risk-averse, macro factors may make themselves felt as products are launched.
What matters after day one is whether money keeps coming in. While there is widespread confidence the funds will be approved, that still needs to happen. Launch volumes will likely be smaller than Bitcoin and ETH, but the legal overhang is lighter and the market infrastructure exists. If history repeats itself, XRP trading volumes are still likely to surge after the fund approvals. The REX-Osprey spot ETF based on XRP reached about $38 million when it launched, the biggest first-day volume of any new US ETF in 2025.
Appetite among banks
Ripple’s payment token saw most progress so far with payments and fintech firms, while banks are coming on board more slowly. In early August, the SEC and Ripple ended appeals to a nearly four-year court battle over whether the issuer’s sale of the payment token qualified as a sale of unregistered securities. The court ruled that routine exchange sales of XRP were not securities deals, though some past institutional sales were. The ruling marked a major win for Ripple, and with the case closed, it’s easier for fund managers and platforms to take on XRP exposure, meeting demand for the crypto coin from their investors.
But XRP and its related ETFs are also appealing to banks, which are traditionally more conservative, mainly as vehicle for quick international payments. XRP doesn’t use Bitcoin’s energy-hungry Proof-of-Work, nor Ethereum’s Proof-of-Stake, where fees can go high, and settlement can lag. With XRP, validators agree on transactions in just a few seconds. The token promises simple, fast, and cheap transfers. It can also act as a bridge between two currencies, so banks and payment firms don’t have to park cash in multiple foreign accounts.
In a typical cross-border euro-to-yen payment, a bank converts euros to XRP at a local venue, transmits XRP across the ledger, and the recipient converts XRP to yen on its side. The ledger settles in seconds, removing the need for pre-funded accounts and leaving out intermediaries.
This challenges the banks’ own international payment system, SWIFT, which instructs correspondent banks to move money, although settlement occurs later due to cut-off times and time-zone delays, and incurs layered fees. XRP settles in about three to five seconds for a fraction of a cent. Ethereum-based transfers typically complete in several minutes and Bitcoin deals in about an hour, with fees in both cases potentially reaching several dollars. SWIFT is also testing its own blockchain links.
SBI Remit, a Japanese remittance provider, has already been using XRP for transfers from Japan to parts of Southeast Asia since 2021. Even in the US, banks such as PNC have used Ripple’s network for cross-border payments, usually without holding XRP on their balance sheet.
