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Prediction: XRP Will Hit $4 by Oct. 1
In mid-July, amid all the excitement about "Crypto Week" in Washington, XRP (CRYPTO: XRP) soared to a 52-week high of $3.65, which was mere pennies away from the cryptocurrency's all-time high of $3.84. For many crypto investors, then, it's not "if" but "when" XRP surpasses the $4 mark.
Most likely, XRP will hit $4 by Oct. 1. This prediction is based on an important event coming up in October that could change the way crypto investors think about XRP.
Arrival of the spot XRP ETFs
Currently, the only two cryptocurrencies with spot ETFs are Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH). This situation is expected to change soon.
Several investment firms have submitted spot XRP ETF applications, and the Securities and Exchange Commission is set to rule on all of them in the period between Oct. 18 and Oct. 25. For example, Grayscale has a spot XRP ETF decision coming up on Oct. 18, 21Shares on Oct. 19, and Bitwise on Oct. 20.
If the SEC follows the same approach as it did with the Bitcoin and Ethereum ETFs, it will likely do a bulk approval, approving all of them simultaneously or pushing all of them back for further review.
Online speculation suggests the SEC might expedite its timeline, possibly approving these ETFs in September instead of October due to a recent rule change.
Why the spot XRP ETFs matter
XRP is now a $180 billion digital asset, ranking as the third-largest cryptocurrency by market cap. It trails only Ethereum ($440 billion) and Bitcoin ($2.3 trillion) in size, accounting for roughly 5% of the total crypto market value.
This size and heft make XRP very attractive to institutional investors, who are likely to be the biggest buyers of the new spot XRP ETFs. On diversification grounds alone, it's worth considering XRP to round out a Bitcoin-heavy crypto portfolio.
According to analysis from JPMorgan Chase earlier this year, as much as $8 billion could flow into XRP by the end of 2025 due to the new ETFs. This consistent buying should help to push up the price of XRP in the coming months. As we approach the first spot XRP ETF approval date (Oct. 18), buying pressure is likely to build.
There are currently other XRP ETFs trading in the marketplace, but they are not spot ETFs based on current market prices. Instead, they use a mix of financial derivatives to create a synthetic XRP position. Demand for these ETFs has been reportedly strong, with investors drawn to XRP's upside potential.
This same bullish investor demand is likely to carry over to the new spot ETFs. The new ETFs will provide superior price tracking of XRP by buying XRP directly in the spot crypto market, avoiding reliance on financial derivatives and carrying less risk.
Spot XRP or spot XRP ETF?
While the new spot XRP ETFs can play an essential role for institutional investors, their appeal for individual investors is less clear. For example, if you have an account at a cryptocurrency exchange such as Coinbase Global, why not just buy spot XRP directly? The same logic applies if you have a brokerage account that enables crypto trading.
Although an ETF provides 1-to-1 exposure to XRP's price action, you won't own the underlying asset. Instead, you'll own shares in a fund that owns XRP. For some investors, this might not matter. However, others might prefer to hold XRP directly.
Moreover, it's notable that BlackRock -- a leader in spot crypto ETFs -- currently does not plan to offer a spot XRP ETF, which is another reason for some investors to buy XRP directly. If everything goes according to plan, XRP will reach the $4 mark just as the final quarter of the year begins.
This article has been published in fool.com via Yahoo News.
