XRP ETF Premium Speculation

However, despite community interest, no asset manager has yet applied for an XRP ETF, leaving the outlook speculative.

A prominent member of the XRP community and seasoned game designer, Chad Steingraber, recently advocated for the possibility of an XRP ETF carrying a 100x premium.

Steingraber provided valuable perspectives on the prospective path of an XRP exchange-traded fund (ETF) about institutional demand, as discussed in a recent X post.

Significantly, the XRP community has urged asset managers, BlackRock in particular, to initiate the development of an XRP ETF. They expect favorable effects on the market value of the asset after the introduction of the investment product in question.

Amidst this sanguine sentiment, Steingraber engaged in conjecture regarding the potential selling price of XRP ETF shares. He was involved in speculation regarding the possibility of XRP attaining an all-time high of $5.

Steingraber postulated that should XRP surpass a $5 price threshold, the corresponding exchange-traded fund (ETF) could experience an unparalleled surge, potentially trading at an excessive 100x premium. In essence, this forecast values the ETF’s shares at $500.

Such a high premium for an XRP ETF would be exceedingly feasible, according to the XRP community figure, should more institutions develop an interest in the XRP investment product.

Steingraber, meanwhile, emphasized that the market price of XRP might not need to soar for the fund to achieve exponential growth. He drew parallels to the investment product associated with Litcoin (LTC) offered by Grayscale.

Steingraber noted that the Grayscale Litecoin Fund is substantially above its net asset value (NAV).

More precisely, he stated that institutions are paying a premium of $253.98 per Litecoin equivalent within the fund, despite the cryptocurrency’s market price of $95.82.

In essence, the XRP community anticipates that an XRP ETF will incur a comparable high premium due to the increasing interest of institutions.

Arbitrage Opportunities and Market Dynamics in the XRP ETF Landscape

In reply to this perspective, X user Zack inquired whether individuals holding the physical asset could arbitrage the anticipated high XRP ETF premium.

Chad Steingraber replied that individuals could engage in arbitrage by depositing the asset in exchange for the corresponding share value if issuers permit In-Kind deposits.

Nevertheless, he observed that In-Kind deposits are a significant factor in the ETF market. However, Steingraber maintained a positive outlook on the industry’s trajectory, expressing hope that these practices would gain widespread adoption shortly.

Despite persistent calls for the investment product, no asset manager has applied for an XRP ETF, so this outlook remains speculative.