Bitwise Files for XRP ETF, Crypto Prices Bounce as Oil and Gold Retrace
Crypto Market Update
Crypto prices have rebounded slightly following yesterday’s sharp selloff, with BTC 3.13% climbing back above $61,000 and SOL 3.83% moving above $145, while ETH 2.84% is lagging, trading around $2,400. Among today’s outperformers is SUI 4.48% , which appears resilient despite a $115 million token unlock yesterday. Oil is partially retracing its early rally, gold is lower on the day, and yields are moving higher, suggesting at least a temporary reversal of yesterday’s conflict-induced risk-off sentiment. The SPY -0.27% and QQQ -0.19% opened in negative territory but have rallied since the U.S. market opened, with the tech sector showing leadership today. Notably, ADP employment numbers released this morning came in above expectations, possibly contributing to the rise in yields.
Bitwise Files for a Spot XRP ETF
Bitwise has filed a registration statement with the SEC for a spot XRP 1.52% ETF, aiming to provide investors exposure to XRP. BNY Mellon will act as the trust’s administrator, while Coinbase Custody Trust Company will serve as custodian. In its filing, Bitwise stated that XRP is not a security, challenging the SEC’s previous stance. The company acknowledged that if a court or regulatory body rules otherwise, the trust might face liquidation. If approved, this would be the first spot XRP ETF, although it faces immediate regulatory challenges.
SEC Has Until 10/7 to Appeal the XRP Case
In July 2023, Judge Torres ruled in the Ripple v. SEC case that Ripple’s sales to institutional investors were securities transactions, as they involved an investment contract. Importantly, she also ruled that programmatic sales to retail investors, conducted via exchanges, did not constitute securities transactions, as no direct investment contract existed between Ripple and the retail buyers. The case regarding institutional sales continued until the final ruling on August 7, 2024, when Ripple was ordered to pay a $125 million civil penalty—substantially less than the $2 billion initially sought by the SEC. With the case now resolved, the SEC has until October 7th (next Monday) to appeal the initial ruling on programmatic sales. There is strong reason to believe that the SEC will proceed with an appeal, given its earlier attempt to file an interlocutory appeal, which sought to challenge the programmatic sales decision before the case was concluded. However, this development could position XRP as an “election trade,” with potential upside if a new SEC administration withdraws any appeal, thereby increasing the likelihood of an XRP ETF approval.
Technical Strategy
Following Bitwise’s registration statement filing for an XRP 1.52% spot ETF, prices are falling for a third straight day, erasing most of the advance which began in late September. However, trends remain positive since this past Summer, and this pullback is seen as providing an attractive opportunity for Ripple following the September rally back to new multi-month highs. Recent consolidation should likely find strong support between $0.55-$0.58 before turning back higher, with initial upside targets found at $0.665, then $0.7450. XRP has largely moved range-bound since last July, and this recent strength from this July is seen as base-building ahead of an eventual rally. At present, it’s expected that recent selling pressure should abate and turn higher into late October. However, movement back over March 2024 peaks at $0.74490 is necessary before expecting that a larger intermediate-term rally has gotten underway.
Daily Important Metrics
All metrics as of 2024-10-02 15:38:43 All Funding rates are in bps Crypto Prices
All prices as of 2024-10-02 12:06:29 Exchange Traded Products (ETPs)
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