XRP ETF approval odds have surged to 99%, but experts are predicting that the rise of on-chain investing may render ETFs obsolete in 5 years.
The XRP ETF approval has captured market attention as traders expect the U.S. Securities and Exchange Commission (SEC) to give the green light soon.
On prediction platform Polymarket, odds for an XRP ETF to be approved have also soared above 99%. Yet, while investors expect a major milestone, some industry leaders believe ETFs may not have much of a future in crypto investing.
Older Investors Drive Demand for Crypto ETFs
Hugo Philion, the co-founder of Flare Network, argues that exchange-traded funds could become obsolete within five years as more investors adopt blockchain-based ownership.
🚨 XRP ETF Approval at 99%… But Will It Even Matter?
While the SEC green light seems inevitable, one expert says the excitement is short-sighted.
🗣 “ETFs will be irrelevant in 5 years,” says Flare Network’s Hugo Philion.
He believes younger investors will ditch Wall Street… pic.twitter.com/KL74CtuZK2— Boom Change (@BoomChange1) September 27, 2025
Philion explained on the Paul Barron Podcast that older generations, including baby boomers and Gen X, hold most of the global wealth today.
They prefer traditional investment products like ETFs, which makes spot crypto ETFs attractive for them. This preference explains the strong demand for regulated crypto funds that resemble familiar stock-market products.
Younger investors, however, prefer to hold digital assets directly in wallets and interact with DeFi platforms.
Philion believes this generational difference will gradually reduce the need for ETFs.
Shift Toward Direct On-Chain Ownership
Philion also cited financial challenges as a reason ETFs might fade.
Unfunded retirement liabilities, rising government debt, and market uncertainty could encourage investors to take control of their assets on blockchain networks.
This approach allows for transparent and direct ownership without relying on intermediaries like fund managers.
“The rejoicing around ETFs is hilarious because I think in five years, ETFs will be irrelevant,” Philion said.
His comments indicate that the current celebration of ETF approvals may be short-lived.
XRP ETF and Its Significance for the Market
If approved, the XRP ETF would mark another milestone in the addition of cryptocurrencies to traditional finance.
Spot Bitcoin ETFs have already attracted billions in inflows, and are proving investor appetite for regulated products. XRP could follow a similar path if the SEC’s decision aligns with market expectations.
Such an ETF would make it easier for mainstream investors to gain exposure to XRP without needing to set up crypto wallets or use exchanges. This accessibility could boost liquidity and price stability in the near term.
Expert Debate Over ETF Relevance
Not all analysts agree with Philion’s prediction. ETF specialist Nate Geraci believes crypto ETFs could reshape investments as a whole, especially for companies that hold large crypto reserves on their balance sheets.
These include well-known companies like MicroStrategy, Metaplanet, and Bitmine.
Geraci argues that ETFs, especially those offering staking options, could reduce the need for investors to buy shares in these companies.
However, Bloomberg ETF analyst James Seyffart counters that ETFs cannot engage with decentralised finance ecosystems the way crypto-native firms can. He believes treasury firms will retain a role, though some may lose appeal as ETFs mature.
Regulatory Scrutiny on Crypto Treasury Firms
U.S. regulators, including the SEC and the Financial Industry Regulatory Authority (FINRA), are increasing their grip on companies with massive crypto holdings. Investigations into unusual trading activity around crypto-related announcements have raised questions about possible insider trading.
Former SEC lawyer David Chase notes that these probes often start with inquiries into trading patterns and can escalate into more extensive investigations.
The sharp rise in the stock prices of firms like MicroStrategy and Bitmine has drawn particular attention and is showing the need for transparent practices in the sector.