The SEC has acknowledged Bitwise's application for an XRP ETF, but XRP is down 3% on Tuesday. Unchained Crypto warns of potential underperformance due to weak revenue, limited institutional interest, and significant selling pressure.
The Sec urities and Exchange Commission ( SEC ) acknowledged Bitwise 's application for an XRP Exchange Traded Fund ( ETF ) filed with the Cboe BZX Exchange. This action opens a 240-day window at the end of which the SEC must decide whether to approve the product or not. Investors have 21 days to comment on the application after it is published in the SEC 's federal register. The SEC has previously acknowledged similar XRP ETF applications from Grayscale and 21Shares.
WisdomTree and Canary Capital's applications are the only remaining ones the SEC has yet to acknowledge. However, despite this positive development, XRP is down 3% on Tuesday. Unchained Crypto noted that the XRP ETF could underperform due to several fundamental concerns. \\\One key issue raised is that altcoin ETFs, like the proposed XRP ETF, are likely to underperform as institutional investors are still navigating the landscape of Bitcoin and Ethereum ETFs. Furthermore, XRP Ledger's projected revenue for 2024 is a mere $1.15 million, significantly lower than the over $1 billion in fees generated by Ethereum. Finally, Unchained Crypto highlighted the potential for significant selling pressure from Ripple Treasury's holdings of 4.485 billion XRP, with an additional 38.9 billion XRP in escrows, which could deter investors. \\\Despite these concerns, Bloomberg analysts James Seyfarrt and Eric Balchunas have predicted a 65% chance of XRP ETFs getting approved by the SEC, even amidst the ongoing legal battle between the agency and Ripple. XRP's price action is also showing signs of weakness, having declined nearly 10% in the past three days following a rejection near the upper boundary of a symmetrical triangle pattern. This decline saw XRP cross below both the 50-day Simple Moving Average (SMA) and 14-day Exponential Moving Average (EMA). The symmetrical triangle's lower boundary line could provide support for a bounce, aiming for the $2.72 resistance. However, a strong extended decline below this support could signal a breakdown, potentially pushing XRP towards the $1.96 level if the $2.17 support also fails. Technical indicators like the Relative Strength Index (RSI) and Stochastic Oscillator are also showing bearish momentum, adding to the concerns around XRP's short-term outlook.
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