GSR’s analysis indicates challenges for XRP and Cardano in adapting to ETFs.
Ripple CEO Brad Garlinghouse aims for an XRP ETF launch by 2025.
While the cryptocurrency ETF market expands, not all digital assets are poised for a smooth transition. Notably, GSR’s latest research underscores the complexities surrounding the potential introduction of an XRP ETF. Currently, XRP is trading at $0.4759, reflecting a 0.18% increase over the past day but a 2.24% decrease over the previous week.
GSR’s assessment methodology evaluates multiple cryptocurrencies for ETF suitability, blending market demand indicators and decentralization measures through a comprehensive scoring system.
A critical aspect of GSR’s evaluation is decentralization, which emphasizes features like open participation and network hardware diversity.
The Nakamoto Coefficient, a pivotal metric in this study, gauges vulnerabilities to collusion or control by measuring the concentration of operational power within a network.
XRP and Cardano’s Decentralization Challenges
Both XRP and Cardano performed poorly in terms of decentralization, scoring -0.9 and -0.1 respectively. These scores raise concerns about the underlying network architectures of these cryptocurrencies. Such low decentralization scores indicate potential hurdles for these assets in transitioning to ETFs smoothly.
Source: GSR
Equally critical alongside decentralization is demand potential. GSR forecasts ETF demand for each cryptocurrency based on factors like market capitalization, trading volume, and community engagement levels.
In terms of demand metrics, despite their popularity, XRP and Cardano scored -0.2 and -0.5 respectively, trailing behind cryptocurrencies with stronger indicators of future market demand.
Challenges in ETF Launch
The lower scores in both decentralization and demand suggest significant obstacles for XRP and Cardano in their ETF launches, particularly in a rapidly evolving market.
Source: GSR
Nevertheless, Ripple CEO Brad Garlinghouse remains optimistic, as reported by CNF, expressing confidence in the release of an XRP ETF by 2025.
As XRP and Cardano navigate these challenges, GSR is more optimistic about other cryptocurrencies like Ethereum, Solana, and NEAR. These assets exhibit higher demand and decentralization ratings, indicating a potentially smoother path to ETF adaptation.
Challenges Facing XRP ETFs GSR Analysis Emphasizes Obstacles