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
Ever since the launch of exchange-traded funds (ETFs) in the US tracking the performance of Bitcoin (in January 2024) and Ethereum (July 2024), industry participants have been wondering what’s coming next.
There have been some indications lately that an XRP ETF may go live in the near future. Bitwise registered such an investment instrument in Delaware at the beginning of October, while Canary Capital followed suit several days later. The former is yet to file the ETF with the US SEC (the agency that decides whether these funds will be approved), while the latter already did so.
The Commission has been at legal war with Ripple for nearly four years, meaning a green light from it could be quite challenging. However, a possible nod is not entirely out of the cards and might significantly boost the price of XRP. We decided to ask ChatGPT to specify exactly how high the valuation could jump if that were the case.
The AI-powered chatbot estimated that the token’s price could soar to $1.50 within months of approval. However, this exponential rise would depend on other elements, including increased institutional investment, broader market adoption, and more.
ChatGPT went even further, predicting that the potential green light of an XRP ETF combined with a favorable resolution of the Ripple v. SEC lawsuit could pump the asset’s value to over $2.50 in the mid-term.
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.
Prior to the contend, the magistrate ordered the company to pay a $125 million penalty for violating certain securities laws, an amount representing just a fraction of the $2 billion the SEC initially sought.
Watch Out for Sell the News Effect
Conversely, ChatGPT warned investors that XRP’s value may head south even if the ETF tracking the asset’s performance is approved due to some behavioral factors.
One example is “the Buy the Rumor, Sell the News” phenomenon, in which prices rise in anticipation of a positive event and then plummet after an official announcement.
“While an ETF approval generally signals a positive outlook for an asset, XRP’s reaction will depend heavily on the timing, market sentiment, and investor behavior. If many traders are already positioned for a bullish outcome, a price drop is possible due to profit-taking and unmet expectations,” the chatbot claimed.
A classic “sell-the-news” event occurred at the start of this year. BTC’s price gradually increased for months in anticipation of the approval of the first spot Bitcoin ETF in America. Shortly after the launch, though, the asset made a U-turn, erasing much of the gains.
