- Spot XRP ETFs have 85% approval odds with the new SEC Chair Paul Atkins, according to Bloomberg analyst Eric Balchunas.
- Solana and Litecoin spot ETFs have a slightly higher chance of approval at 90%.
- The SEC has delayed its decision on Franklin Templeton’s spot ETF to June 17.
- XRP’s price faces increasing downward pressure, but uptrend toward $3.00 looks steady as long as it holds above the 4-hour 50-day EMA at $2.21
Ripple (XRP) price hovers at $2.24 at the time of writing on Wednesday as bulls try to prevent the pullback from its April peak of $2.36 from extending further. A reversal could soon gain momentum with Bloomberg’s Exchange Traded Fund (ETF) analyst, Eric Balchunas, releasing his team’s latest approval odds for all the different spot ETFs, including XRP, after Paul Atkins officially took over as Chair of the Securities and Exchange Commission (SEC).
Spot XRP ETFs boast 85% approval probability
According to Balchunas, five spot XRP ETFs, including Grayscale, WisdomTree, 21Shares, Canary, Bitwise, and Franklin Templeton, have an 85% chance of approval after the change in leadership at the SEC. Solana (SOL) and Litecoin (LTC) spot ETFs have a higher chance of approval at 90%, while Dogecoin (DOGE) and Hedera (HBAR) spot ETFs fall slightly below spot XRP ETFs at 80%. Spot ETF filings related to Cardano (ADA), Polkadot (DOT), and Avalanche (AVAX) have a 75% chance of approval.
Meanwhile, the SEC postponed its decision on Tuesday on Franklin Templeton’s spot XRP ETF, subsequently setting a new review deadline on June 17. According to the filing made via the Cboe BZX Exchange, the product would be listed under the name Franklin XRP if approved. The SEC was expected to decide on the application on May 3, but highlighted the need for more time to evaluate the proposed rule change and, at the same time, address regulatory issues raised in the filing.
Interest in altcoin-based ETFs continues to grow, with an increasing number of fund managers seeking approval. According to the latest filings, Nasdaq has filed a 19b-4 form with the SEC on Tuesday to list the 21Shares Dogecoin (DOGE) ETF. This application follows the 21Shares S-1 filing with the SEC on April 10, which seeks to provide investors with indirect exposure to the largest meme coin. Coinbase Custody Trust was picked as the official custodian of the ETF.
At the same time, the SEC has issued a notice postponing its decision on the Bitwise spot DOGE ETF application. The review period is therefore extended to June 15.
XRP price under pressure as downside risks mount
XRP’s price faces increasing sell-side pressure as it slides to test the 50-day Exponential Moving Average (EMA) at $2.21. A confirmed sell signal in the Moving Average Convergence Divergence (MACD) indicator on the 4-hour chart reinforces the bearish momentum, potentially driving XRP losses toward the confluence support at $2.17, where the 100-day and 200-day EMAs intersect. The MACD line (blue) confirms a sell signal after crossing below the signal line (red).
The downward-sloping Relative Strength Index (RSI) indicator, currently at 44.99, also signals that bearish momentum is intensifying, with bears likely to dominate in upcoming sessions. Moving towards the oversold region, below 30, would reinforce the bearish grip and hint at a potential reversal if traders buy the dip.
XRP/USD daily chart
Beyond the confluence resistance at $2.17, XRP’s price may find support at $2.00, a level that has been repeatedly tested for both support and resistance in April. A further decline past this point could target the next demand zone at $1.80, with April’s low of $1.61 coming into focus if losses persist.
SEC vs Ripple lawsuit FAQs
It depends on the transaction, according to a court ruling released on July 14, 2023:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and had to pay a $125 million civil fine.
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales persist.
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.