Over the past few years, Ripple Labs’ XRP cryptocurrency has attracted the attention of both retail and institutional investors. However, ongoing legal battles between Ripple and the U.S. Securities and Exchange Commission (SEC) have raised concerns about the prospects for institutional adoption of XRP, as well as the possibility of creating exchange-traded funds (ETFs) based on the cryptocurrency.
There are 57.89 billion XRP tokens in circulation. XRP has seen expository growth over the past year, rising from $0.54 in February 2024 to $2.42 in February 2025, an increase of over 348%. As of February 24, 2025, the XRP price is $2.42, reflecting a decrease of 5.47% from the previous day.
Ripple vs. SEC Lawsuit
In December 2020, the SEC filed a lawsuit against Ripple Labs, alleging that the company raised more than $1.3 billion through an unregistered securities offering as a sale of XRP. Because XRP is a security, the SEC requires that its sales comply with federal securities laws. Ripple denies these claims, arguing that XRP is a currency, not a security.
The Impact of Litigation on Institutional Acceptance
The ambiguity surrounding XRP’s legal status due to the SEC litigation has had an impact on institutional investors. Due to potential legal and financial risks, many choose to avoid assets with uncertain regulatory status. Additionally, to limit XRP’s accessibility to institutional investors, some cryptocurrency exchanges have temporarily suspended trading or delisted it.
April 16, 2025, is a date that will determine the prospects of institutional investment in XRP, as well as decide Ripple’s legal battle and possible ETF approval.
XRP-Based ETF Development
Despite legal hurdles in the United States, efforts are underway to create investment products related to XRP. In November 2024, U.S.-based asset manager WisdomTree launched an exchange-traded product (ETP) called WisdomTree Physical XRP ETP (ticker: XRPW) on European exchanges such as Deutsche Börse Xetra, SIX Swiss Exchange, and Euronext in Paris and Amsterdam. Investors can gain exposure to XRP through regulated exchange platforms using this ETP. The product offers a low management fee of 0.50% and is fully backed by XRP.
In February 2025, Brazilian company Hashdex announced its plans to create the world’s first XRP-based spot ETF, the Hashdex Nasdaq XRP Fund. The fund has received approval from Brazil’s securities regulator and is now preparing for launch. This is expected to be a notable step in the institutional adoption of XRP in Latin America.
SEC Position on XRP ETF in the US
In the U.S., the situation remains uncertain. In February 2025, companies such as Grayscale, Bitwise, CoinShares, Canary Capital, and WisdomTree submitted several applications to the SEC to launch ETFs that track the price of XRP. Acceptance of an application marks the beginning of the evaluation process and the collection of public opinion, but it does not guarantee approval of the product. Earlier in 2024, the SEC approved several Bitcoin-based cryptocurrency exchange-traded funds (ETFs), which led to an increase in the cryptocurrency price and increased institutional interest. However, the approval of an XRP ETF in the United States remains uncertain due to the ongoing lawsuits with Ripple.
Potential Market Implications
The approval of an XRP-based ETF could increase institutional investors’ confidence in the asset, as it gives them access to transparent and controlled investments. This could lead to increased liquidity and stability for XRP. However, many institutional investors may not invest in XRP until its legality in the US is determined.
Analysts predict significant inflows into the XRP ETF in the first year after its approval, ranging from $4.3 billion to $8.4 billion. This could cause the price of XRP to jump between $4.60 and $5.00, representing a valuable increase from current levels.
XRP may not be getting the same institutional interest as Ethereum and Bitcoin ETFs, which have historically attracted huge amounts of capital.
Multi-crypto ETFs are becoming increasingly popular, with Bitcoin ETF investment volumes already exceeding $39.8 billion.
The legal battle between Ripple and the SEC has had a principal impact on the institutional adoption of XRP, especially with the launch of an XRP-based ETF in the United States. In the United States, institutional interest remains limited by uncertainty. However, in other countries, such as Europe and Brazil, efforts are underway to launch investment products related to XRP. The future of institutional adoption of XRP depends largely on how the lawsuit plays out and what the regulator does.
