XRP ETF Premium Primed For Monumental Leap: Eyes Set On $500
28 Marzo 2024 - 8:04AM
NEWSBTC
XRP enthusiasts are in a frenzy after prominent community figure
Chad Steingraber proposed a scenario where an XRP exchange-traded
fund (ETF) could trade at a staggering 100x premium. Steingraber, a
seasoned game designer, laid out his thoughts in a recent post,
igniting discussions about the potential trajectory of an XRP ETF,
particularly in light of the ongoing push for institutional
adoption of the altcoin. Related Reading: Hold Onto Your Seats: XRP
Primed For 90% Rally, According To Top Analyst Targeting A $500 XRP
ETF Share Price Steingraber’s speculation centers around the price
at which an XRP ETF’s shares might trade. His hypothesis hinges on
the crypto reaching an unprecedented price of $5 per coin. In this
scenario, he theorizes that the corresponding ETF could soar to
equally unprecedented heights, potentially reaching a solid $500
per share. 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 This hefty premium, according to Steingraber, would
be fueled by a surge in institutional interest in the ETF. He cites
the Grayscale Litecoin Trust (LTCN) as a prime example. Similar to
his proposed XRP ETF, LTCN trades at a significant premium over
Litecoin’s current market price. Despite Litecoin hovering around
$95, investors in LTCN are currently paying a premium of over $250
per Litecoin equivalent within the trust. Can Arbitrage
Opportunities Emerge? The prospect of such a high premium has
sparked discussions about potential arbitrage opportunities. X user
Zack, in response to Steingraber’s post, questioned whether
individuals holding XRP could exploit this price disparity.
Steingraber acknowledged the possibility, particularly if the
issuing ETF allows for in-kind deposits, where investors can
directly exchange their token for ETF shares. XRP market cap
currently at $34 billion. Chart: TradingView.com However, he
cautioned that in-kind deposits are still a rarity in the ETF
market. While Steingraber expressed optimism about the future
adoption of this practice, its absence presents a hurdle for
immediate arbitrage opportunities. The XRP community has long
advocated for asset managers, especially industry giant BlackRock,
to launch an XRP ETF. They believe such a product would
significantly bolster the value of XRP by increasing its
accessibility to institutional investors. XRP up in the last seven
days. Source: Coingecko A Speculative Outlook With Underlying
Uncertainties It’s crucial to remember that Steingraber’s vision is
entirely speculative. As of today, no asset manager has taken
concrete steps towards applying for an XRP ETF. Furthermore, the
justification for such a high premium rests heavily on the
assumption of substantial institutional demand, a factor that
remains uncertain. Related Reading: Analyst Bullish On Polkadot
(DOT), Predicts $17 Price Target Before April The applicability of
the Grayscale Litecoin Trust comparison also requires further
scrutiny. The specific structure and features of an XRP ETF would
significantly influence whether a similar premium dynamic would
emerge. A Reality Check For Investors While Steingraber’s
prediction has certainly captured the community’s imagination,
investors are advised to approach it with a healthy dose of
caution. The approval timeline for an XRP ETF hinges on the US
Securities and Exchange Commission’s stance on cryptocurrency ETFs.
Additionally, competition from other potential ETFs could play a
role in determining the premium, if any. Featured image from
Freepik, chart from TradingView
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