GSR’s analysis reveals challenges for XRP and Cardano in adopting ETFs.
Ripple’s CEO, Brad Garlinghouse, anticipates an XRP ETF launch by 2025.
While the market for cryptocurrency ETFs grows, not all digital assets are prepared for a seamless transition. Notably, GSR’s latest research underscores the hurdles facing a potential XRP ETF introduction. Currently, XRP is trading at $0.4759, marking a 0.18% increase in the past day but a 2.24% decrease over the previous week.
GSR’s evaluation methodology assesses multiple cryptocurrencies for ETF suitability, amalgamating market demand indicators and decentralization metrics through a rigorous scoring system.
Critical examination by GSR emphasizes decentralization, highlighting aspects like open participation and network hardware diversity.
The Nakamoto Coefficient, a pivotal metric in this study, identifies vulnerabilities to collusion or control by measuring operational power concentration within a network.
XRP and Cardano’s Decentralization Concerns
Both XRP and Cardano notably underperformed in terms of decentralization, scoring -0.9 and -0.1 respectively. This poor decentralization score raises questions about the structural integrity of both networks and suggests potential challenges for these cryptocurrencies in achieving ETF approval smoothly.
Source: GSR
Demand potential is equally crucial alongside decentralization. Using metrics such as market capitalization, trading volume, and community engagement levels, GSR predicts ETF demand for each cryptocurrency.
In terms of demand metrics, despite their popularity, XRP and Cardano scored -0.2 and -0.5 respectively, trailing behind other cryptocurrencies with stronger indicators of future market demand.
Challenges in ETF Launch
The lower scores in decentralization and demand imply significant obstacles ahead for XRP and Cardano, particularly in a rapidly evolving market, before their ETFs can be launched.
Source: GSR
Nevertheless, it’s noteworthy that Ripple’s CEO, Brad Garlinghouse, remains optimistic. Recently reported by CNF, he expresses confidence in the eventual release of an XRP ETF by 2025.
While XRP and Cardano grapple with these issues, GSR’s assessments favor other cryptocurrencies like Ethereum, Solana, and NEAR. Their higher ratings in both demand and decentralization suggest a smoother path toward ETF adaptation.
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