An expert explains BlackRock’s lack of push for an XRP ETF.
The cryptocurrency industry is giddy with excitement over the potential launch of an XRP ETF now that Ripple’s XRP litigation settlement has been finalized. BlackRock, the biggest asset management firm in the world, has drawn a lot of attention for its silence in the face of the growing craze for XRP exchange-traded funds.
Expert All Things XRP released a series of X posts outlining BlackRock’s vision and potential explanations for its silence. Let’s examine the expert’s comments, going over the salient features that illuminate BlackRock’s approach to cryptocurrency investing.
Why Is BlackRock Silent on XRP ETF?
Expert All Things XRP provided insight into BlackRock’s strategic decisions to avoid creating an XRP ETF in a series of X posts. The expert claims that several issues, including market dynamics, regulatory concerns, and strategic considerations, are causing BlackRock to be hesitant to introduce an XRP exchange-traded fund.
BlackRock Prioritizes Ethereum and Bitcoin
Notably, one of the primary reasons to avoid XRP is the asset manager’s emphasis on Bitcoin and Ethereum ETFs. Right now, BlackRock is benefiting from the rise of Ethereum and Bitcoin.
It is reported that the assets under management (AUM) of the iShares Bitcoin Trust exceed $30 billion. Furthermore, in just two months, BlackRock’s ETH ETF has grown its AUM to $1 billion. The platform is cautious while investigating other altcoins in light of this achievement in order to reduce any potential hazards.
Moreover, XRP may not meet BlackRock’s internal thresholds for demand, liquidity, and legal clarity. According to the company’s ETF executives, only Bitcoin and Ethereum currently meet these requirements.
Regulatory Issues
The expert pointed out that BlackRock’s reluctance to support Ripple is largely due to regulatory worries. Even though the SEC and Ripple both withdrew their appeals in the XRP case, the term “security” is still being used, therefore, the case is not yet done. The investment behemoth might decide not to apply for an XRP ETF because of this uncertainty.
All Things XRP has provided information about the pivotal role that CEO Brad Garlinghouse had in Ripple’s expansion.
The Strategic Wait-and-See Method Used by BlackRock
It’s interesting to note that BlackRock is taking a cautious stance, waiting for rivals like Franklin Templeton and Grayscale to introduce their XRP ETFs. These platforms will first have to deal with any potential regulatory obstacles, but it will make it easier for BlackRock to enter the ETF market. This strategy will also enable BlackRock to evaluate the risk environment and determine institutional interest in XRP products.
The creation of an XRP ETF is expected to result in a notable increase in the price of the Ripple coin, regardless of who takes the lead.
The asset manager’s cautious approach has also been reinforced by their fictitious XRP ETF registration in 2023. In the past, the file caused uncertainty in the cryptocurrency market and went viral. The investment firm’s reputation might have suffered as a result of having to openly deny involvement. Because they might want to steer clear of similar PR problems, this incident may have made them wary of pursuing an XRP ETF, at least for the time being.
Will BlackRock Introduce an ETF for XRP?
The asset manager’s choice was also influenced by other elements, such as XRP’s comparatively tiny market share and lack of demand. However, after addressing every potential obstacle, BlackRock is anticipated to advocate for an XRP ETF in the future.
BlackRock has a reputation for releasing items when the timing is right and the chances are in its favor. When XRP achieves full regulatory clarity and market stability, the strategic move is anticipated. According to All Things XRP, BlackRock wants to control the market. “But if and when they do, it’ll be to dominate the space, not just participate,” the analyst said.
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