XRP ETF: Why BlackRock Is Still Holding Back

XRP ETF discussions are heating up, especially as Ripple’s long-running legal tensions with the U.S. Securities and Exchange Commission (SEC) draw to a close. Yet despite the positive momentum in 2025, asset management behemoth BlackRock has not joined the current wave of fund managers racing to file for a spot XRP exchange-traded fund. On Friday, the firm confirmed it has no plans to file for such a product — leaving many XRP supporters puzzled.

The announcement came just a day after Ripple Labs and the SEC jointly requested an appeals court to dismiss their respective appeals. This request marked the end of a nearly five-year courtroom saga, fueling optimism that regulatory headwinds for XRP products were finally clearing. However, BlackRock’s hesitation has introduced a note of caution into an otherwise bullish narrative.

While competitors including ProShares, Bitwise, and Grayscale have initiated efforts to launch XRP ETFs since late 2024, BlackRock – despite being a leader in bitcoin and ether ETFs – remains on the sidelines. Let’s explore the five likely reasons behind the company’s reluctance to dive into the XRP ETF race.

1. Lack of Broad-Based Client Demand for XRP

Client preference remains a key driver for BlackRock, and currently, broader demand for assets beyond bitcoin and ether appears limited. Back in March, Robert Mitchnick, BlackRock’s head of digital assets, made it clear that most of their clients are not showing significant interest in cryptocurrencies beyond the two largest players.

In a public discussion held at the Bitcoin Investor Day conference, Mitchnick explained that bitcoin remains the primary interest among their clientele, with only “a little bit” of attention focused on ethereum. These remarks highlight the firm’s data-driven approach, prioritizing product development around clear investor demand.

2. Ongoing Regulatory Ambiguity

Though the SEC case with Ripple is wrapping up, the broader regulatory framework for altcoins like XRP remains inconsistent. Despite XRP’s sales on public exchanges being labeled as non-securities, lingering uncertainty makes any investment product tied to it riskier from a compliance perspective.

BlackRock, known for its cautious and compliance-focused strategy, may be hesitant to proceed until the SEC clarifies how altcoins, in general, will be treated moving forward—particularly when it comes to consumer protections and audit standards. This conservative posture distinguishes it from more aggressive players like ProShares, which moved early in 2025 to file not only for a spot XRP ETF but also for futures-based offerings that track XRP derivatives rather than the token itself.

3. Saturated Market of XRP ETF Filings

As of August 2025, at least seven companies, including Franklin Templeton and 21Shares, have pending applications for spot XRP ETFs. The crowded space presents diminishing returns for late entrants like BlackRock, especially in a niche where marginal advantages are limited.

By the time a new product goes live, the firm might see reduced margins or insufficient differentiation to justify the operational complexities involved. This calculation could be playing a role in BlackRock’s apparent decision to observe rather than participate—at least for now.

4. Data Over Hype: BlackRock’s Analytical Lens

The XRP community’s longtime expectation has been that the launch of an ETF would lead to massive retail and institutional adoption. However, BlackRock’s internal models may not reflect that same growth outlook.

Despite positive betting odds on platforms like Polymarket, which suggest a 77% chance that the SEC will approve an XRP ETF this year, BlackRock is taking a measured approach. While the firm is experimenting with tokenized assets on networks like Ethereum and Solana, XRP’s smaller market capitalization might not meet the threshold for a profitable ETF launch.

5. Global Strategy and Geographic Demand Gaps

Last but not least, BlackRock’s global outlook may deprioritize XRP due to its regional trading concentrations. A significant portion of XRP’s liquidity and volume comes from Asian markets, regions where BlackRock has comparatively less ETF market penetration.

So, while XRP enthusiasts on platforms like X (formerly Twitter) continue speculating about the potential impact of ETF approval, the geographic distribution of XRP’s volume may not align well with BlackRock’s existing institutional networks and expansion priorities.

Related: XRP Price: $12M Max Pain for Bears

At the time of writing, XRP is valued at around $3.1852, reflecting a 3.92% drop in the preceding 24 hours, according to CoinDesk.