XRP ETF: BlackRock Signals Interest Amid Investor Warning

The growing interest in an XRP ETF has stirred significant debate within the financial and cryptocurrency sectors. Notably, Vandell Aljarrah, co-founder of Black Swan Capitalist, suggests that asset management behemoth BlackRock is showing clear intent to launch an XRP-focused exchange-traded fund. However, Aljarrah also delivers a cautionary perspective, highlighting potential downsides for individual investors.

In a recent statement shared via social media, Aljarrah emphasized that the development of an XRP ETF shouldn’t automatically be perceived as a breakthrough for crypto adoption or utility. According to him, while such a move from BlackRock would undoubtedly signal validation from institutional finance, it also risks stripping XRP of its core functionalities by transforming it into a mere investment vehicle.

When users hold XRP directly, they can benefit from the asset’s utility value — such as sending real-time international payments, providing liquidity, participating in staking opportunities, and maintaining full control via self-custody. However, ETF investors are only exposed to XRP’s price volatility, without access to these fundamental use cases.

Despite this, Aljarrah believes BlackRock’s interest in creating an XRP ETF is likely. He warns, however, that institutional involvement may shift control of the digital asset significantly away from retail users and into the hands of financial giants, potentially altering the decentralized ethos of cryptocurrencies.

Surging Momentum for XRP ETFs

Interest in XRP ETFs has surged since late 2024. A number of asset management firms — including Grayscale, Bitwise, ProShares, WisdomTree, and 21Shares — have submitted XRP ETF applications to the U.S. Securities and Exchange Commission (SEC). Their proposals cover both spot and futures-based products, showing widespread appeal and competition in the space.

Among the notable approvals, ProShares has received regulatory greenlight for three futures-based XRP ETFs, including one featuring inverse exposure with -2x leverage. Grayscale, known for its extensive crypto trusts, is pushing to get its XRP Trust listed on NYSE Arca, with assets under management exceeding $16 million.

Additionally, the U.S.-based exchange MEMX has filed a proposal to offer an XRP ETF structured under the Commodity-Based Trust model — a framework similar to existing Bitcoin and Ethereum ETFs. The involvement of these firms underlines mounting institutional confidence in XRP’s long-term viability.

BlackRock’s Path Forward

Although BlackRock has not formally submitted its application, many market experts speculate that it’s only a matter of time. Given BlackRock’s massive success with its Bitcoin and Ethereum ETFs — amassing over $43 billion collectively — analysts anticipate the conglomerate is closely monitoring legal and market conditions before advancing with an XRP ETF initiative.

Nate Geraci, president of ETFStore, has predicted that BlackRock and similar institutions will soon enter the XRP ETF arena, especially as they won’t want to fall behind competitors such as Bitwise and Grayscale.

Regulatory Winds Shift in XRP’s Favor

The Ripple-SEC lawsuit played a pivotal role in shaping the current regulatory environment. In July 2023, a federal court ruled that XRP does not qualify as a security in and of itself. This landmark decision removed significant legal ambiguity and paved the way for broader institutional participation.

Since then, the SEC has dropped its appeal and moved to settle with Ripple. The ongoing public comment periods for multiple ETF filings mark a clear shift in the regulatory landscape. Currently, the SEC is conducting 240-day review processes to assess these submissions — a process that analysts at Polymarket estimate gives XRP ETFs an 80% chance of approval by 2025.

Related: Expert Advice: Sell XRP If You’re Confused

As the market awaits BlackRock’s potential move, it’s clear the XRP ecosystem is at a critical juncture. While the arrival of ETFs could attract greater mainstream investment, it also raises questions around decentralization, accessibility, and asset utility. Investors and enthusiasts alike will need to weigh these considerations carefully as the regulatory and financial landscapes continue to evolve.