As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market predictions and their eventual outcomes. With that said, the potential for a XRP rally following an ETF approval is certainly not out of the question. However, it’s essential to approach such forecasts with caution and consider the potential risks involved.
TL;DR
- An ETF approval could fuel a triple-digit XRP rally in the mid-term (according to ChatGPT).
Despite the positive outlook, there is a risk of a “Buy the Rumor, Sell the News” effect, where prices fall after the possible green light.
The Potential Price Targets
Since the introduction of Bitcoin and Ethereum exchange-traded funds (ETFs) in the U.S. market, starting from January 2024 for Bitcoin and July 2024 for Ethereum, the financial world has been eagerly anticipating what new developments might emerge.
It seems there’s growing speculation that an XRP ETF could soon become available. Bitwise filed a registration for such an investment product in Delaware at the start of October, followed by Canary Capital a few days later. However, it’s important to note that Bitwise hasn’t submitted the ETF to the US SEC yet, whereas Canary Capital has already done so.
The Securities and Exchange Commission (SEC) has been engaged in a legal battle with Ripple for almost four years now, which means a favorable decision from them might be difficult. Yet, it’s not impossible to imagine a positive signal, and such an outcome could potentially skyrocket the value of XRP. We decided to inquire ChatGPT about how high the valuation could potentially increase if that were to occur.
As a researcher studying the potential impact of regulatory approval on a specific token, I’ve observed that predictions indicate a possible surge in its price, potentially reaching $1.50 within months following approval. Yet, it’s essential to note that this significant increase hinges on various factors such as increased institutional investments, wider market acceptance, and additional elements that could influence the market dynamics.
ChatGPT anticipates that if the XRP Exchange Traded Fund (ETF) receives approval and the outcome of the Ripple vs. SEC lawsuit is favorable, the value of XRP could surge above $2.50 within a medium-term timeframe.
The case has recently witnessed some key developments. As CryptoPotato reported, the regulator appealed a 2023 verdict set by Federal Judge Torres, which ruled that secondary sales of Ripple’s XRP token did not constitute securities sales.
Before the court case, the judge mandated that the company should pay a $125 million fine as a result of breaking some securities laws. This sum was only a small portion of the $2 billion the SEC originally aimed to collect.
Watch Out for Sell the News Effect
Instead, let me rephrase this statement for you: If the ETF for XRP‘s performance gets approved, ChatGPT cautions investors that XRP’s price could still decrease because of certain behavioral aspects.
An illustration is the “Buy the Rumor, Sell the News” occurrence, where prices increase in expectation of a favorable development and subsequently decrease following its formal disclosure.
An ETF approval often indicates good prospects for an asset, but the response of XRP may vary significantly based on timing, market trends, and investor actions. If numerous traders are already expecting a bullish movement, a price decrease might occur as a result of profit-taking and unfulfilled expectations.
At the beginning of this year, there was a typical example of a “sell-the-news” situation. The price of Bitcoin climbed steadily for months due to expectations of the approval of the first spot Bitcoin ETF in the U.S. Following its launch, however, the asset experienced a reversal, wiping out much of its gains.
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2024-10-12 11:04