After hitting a new 52-week high of $3.65 in July, XRP (CRYPTO: XRP) has since fallen below the $3 level. That's obviously of major concern to crypto investors, who were fully expecting XRP to soar throughout the rest of the year.
But all is not lost. There's still one big catalyst on the horizon that could set a fire under the price of XRP, and it's coming on Oct. 18. Let's take a closer look.
Arrival of new spot ETFs
The catalyst that everyone is talking about right now is the potential approval of new spot exchange-traded funds (ETFs) for XRP. Currently, only Bitcoin and Ethereum have spot ETFs, but XRP is now the odds-on favorite to be the next major cryptocurrency to get them. If that happens, XRP could be on the cusp of going fully mainstream.
Right now, Bloomberg says there's a 95% chance that these spot XRP ETFs will start trading this year. And prediction markets appear to concur. Traders on Polymarket currently give these spot ETFs an 87% chance of being approved later this year.
The best part about all this is that we know the exact date when ETF approval is going to happen: Oct. 18. That's when the Securities and Exchange (SEC) is set to begin ruling on new spot XRP ETFs that have already been submitted for issuance by top investment firms, including Grayscale, WisdomTree, and Franklin Templeton.
Earlier in August, the SEC punted on a decision and pushed the deadline back to October. While the decision was disappointing, it makes it easier for the SEC to approve all the XRP ETFs at one time. This is the same way it was done with the spot Bitcoin ETFs. All told, there are eight different spot XRP ETFs that could be approved between Oct. 18 and 25.
How big of an impact will the new ETFs have?
Once the new spot XRP ETFs start trading, they could have a significant impact on the price of XRP. That's because billions of dollars could start to flow into XRP from both retail and institutional investors, thereby helping to push up its price. Estimates from earlier this year from JPMorgan Chase suggested that as much as $8 billion might flow into XRP.
The same phenomenon occurred with Bitcoin when the new spot Bitcoin ETFs started trading last January. The price of Bitcoin immediately soared by a head-spinning 160% as money poured into Bitcoin. If history repeats (which it often does), then XRP could soar from a price of less than $3 to a price of as much as $5. That's the maximum upside scenario, and it requires XRP to follow the same sort of price trajectory as Bitcoin.