- Top analyst has described what impact a XRP ETF premium will do to the price of the cryptocurrency.
- XRP ETF is not launched but optimism in its eventual debut is high.
Taking to the X platform, Chad Steingraber, a notable XRP community member, has made a bold forecast regarding the future trajectory of XRP in the event of the launch of an Exchange-Traded Fund (ETF).
Steingraber’s ETF Speculation
Steingraber noted in his post that if XRP could break its all-time high to $5, its ETF’s value may skyrocket, potentially selling at a 100x premium. This speculative prediction values the notional ETF shares at $500. His prediction is motivated by the notion that rising institutional interest in the XRP investment product will drive up its value dramatically.
The actual underlying asset price does NOT have to skyrocket. The fund can trade at MASSIVE Premiums.
Let’s say #XRP breaks ATH @ $5, its ETF fund could literally trade at 100x premium if the institutional demand kicks in.
Yes, that’s right, a $500 #XRP Institution Premium.
https://t.co/bwN6cGmmZd pic.twitter.com/tHyy4fkbeK
— Chad Steingraber (@ChadSteingraber) March 27, 2024
To back his claim, Steingraber draws comparisons between Grayscale’s investment product linked to Litecoin (LTC). He emphasized that Grayscale Litecoin Fund is currently trading at a substantial premium to its Net Asset Value (NAV).
Despite Litecoin’s current market price of $95.82, institutions are paying a premium of $253.98 per Litecoin equivalent within the fund. According to the XRP community member, this high premium demonstrates the potential for an XRP ETF to earn a comparable premium if institutional interest continues to rise.
In reaction to Steingraber’s point of view, questions arose about whether the expected high XRP ETF premium can be utilized through arbitrage by users holding the asset. Steingraber asserts that if issuers allow In-Kind deposits, people could deposit the asset and profit from arbitrage possibilities by exchanging it for the equivalent share value.
He, however, acknowledged that the In-Kind deposits is an issue of contention in the ETF market. “That’s why In-Kind is a big deal.. we will get there, hopefully, sooner than later,” stated Steingraber.
XRP ETF Anticipation
Although Steingraber offers a fascinating analysis of the possible course of an XRP ETF, his conjecture is still theoretical because no asset manager is yet to submit an application for the product.
Looking into the future, LPL Financial, which manages $1.4 trillion in assets, is in the process of researching the possibility of launching an XRP ETF. Echoing earlier coverage by Crypto News Flash, LPL Financial is determined to only include ETFs that can endure the volatile nature of the crypto markets and avoid the mistakes that have resulted in multiple ETF closures in the past.
Meanwhile, former Ripple Director Sean McBride has revealed that the XRP ETF may see the light of day in either 2024 or 2025, as formerly reported by Crypto News Flash. Notably, McBride’s comment comes on the heels of remarks from Ripple’s CEO, Brad Garlinghouse, stating that the firm is eager to launch an ETF because he envisions a landscape with a variety of possibilities.
As institutional interest grows, the potential of an XRP ETF to increase the price of XRP by 100 times remains appealing. As of the time of writing, XRP is trading at $0.6225, up 1.6% in 24 hours and boasts of a market cap pegged at $34 billion, and trading volume of $1.8 billion.
