The odds on a Ripple exchange-traded fund (ETF) getting approved in 2025 have lowered slightly. It is now sitting at 89% on Polymarket. This figure is a decrease from the 98.2% recorded on June 3. Even with the recent ups and downs, there is no shortage of optimism when it comes to a Ripple ETF launch. Its first-mover advantage over other altcoin ETFs, such as those tied to Solana, powers some of that buzz. The SEC has a major deadline looming on October 10. They have to rule to approve or deny a number of altcoin ETFs, including the much-coveted Ripple ETF.

Especially as anticipation swells around a Ripple ETF. Advocates argue that it is covered by the Investment Company Act of 1940, which requires automatic approval within 75 days, unless the SEC intervenes. The excitement around a Ripple ETF has been tremendous. This enthusiasm comes on the heels of the SEC’s first public signal back in June that it would welcome possible Ripple ETF products. Market analysts and industry experts have their ears to the ground, listening for developments and trying to predict the likelihood of regulatory approval.

Regulatory Landscape and SEC Stance

Optimism around Ripple ETF approval comes from the notion that it would receive the benefit of automatic approval. The only thing that could derail it is active opposition from the SEC. This viewpoint is based on the ETF’s construction and its legality under the Investment Company Act of 1940.

Perhaps the most important consideration by far is the SEC’s increasingly hostile posture toward cryptocurrency products. The agency has traditionally taken a very conservative approach to the approval of crypto-related investment vehicles. I get that their paramount concern is investor protection and preventing market manipulation. The SEC’s current lawsuit against Ripple certainly complicates matters further. As the lawsuit continues, the SEC’s current targeting of Ripple – and its products – will certainly be under a microscopic lens.

Adding to the uncertainty, Ripple CEO Brad Garlinghouse recently announced the firm's decision to drop its cross-appeal in the SEC case, a move that could potentially influence the regulatory landscape. The SEC's first public message about possible Ripple ETF products in June signaled a shift in communication, but the ultimate decision remains uncertain.

Market Sentiment and Expert Opinions

Even with the minor drop in Polymarket’s prediction, things are looking very bullish for a Ripple ETF in general. As the second most anticipated ETF of all time, the Ripple product has attracted a lot of attention from investors and industry observers, in equal measure.

Back in June, ETF trendwatchers James Seyffart and Eric Balchunas threw down the gauntlet with a daring prediction. They calculated an 85% probability that the SEC would approve Ripple ETF applications. Their analysis took into account a number of factors, such as the regulatory landscape, market demand, and the structure of the proposed ETF itself. As an authority on ETF product development, their opinions hold significant sway in the ETF industry, shaping investor perceptions and expectations.

Nate Geraci, President of the ETF Store, comments on BlackRock’s strategy. Though he’s supportive of the company’s current efforts into Bitcoin and Ethereum ETFs, he wants the firm to think bigger. Once the SEC case against Ripple ends, BlackRock will likely look to spread its wings into other crypto exchange-traded funds.

Potential Impact and Future Outlook

The approval of a Ripple ETF would be a seismic shift that sends strong signals throughout the broader crypto landscape. Its exchange listing of Ripple (XRP) provides investors with a regulated and accessible avenue to gain exposure to the digital asset. This would serve to expand market adoption and liquidity.

Furthermore, the approval of a Ripple ETF would pave the way for several other altcoin ETFs. This change would significantly expand the crypto universe available for potential investment. Nonetheless, the SEC’s decision would establish important precedent for any future crypto ETF applications. A rejection would have significant discouragement effects on other manufacturers planning similar products, while an approval might just well open the floodgates.

The outcome of the SEC's review of the Ripple ETF will likely influence the strategies of major asset managers like BlackRock and shape the future of cryptocurrency investments. The industry is still waiting to see how the SEC will act. These actions will have tremendous influence over the direction of the crypto marketplace.