Bitnomial plans to launch margin-based, physically settled XRP/USD futures contracts, fueling speculation about a future spot XRP ETF.
As the Ripple vs SEC lawsuit comes to a conclusion with the recent $125 million penalty settlement by Ripple, crypto exchanges have started taking bold steps with Bitnomial filing for the XRP futures trading with the U.S. Commodities and Futures Trading Commission (CFTC) on Tuesday, August 13.
As per the development, Bitnomial plans to introduce the XRP/USD futures contracts which will be margin-based and physically-settled contracts reflecting the value of 100,000 units of XRP. This development has fueled the speculations of having a potential spot XRP ETF launch in the future.
In its self-certification, Bitnomial has reviewed and ensured that the new contracts would comply with all regulations and standards. The launch of the XRP futures will also help in enhancing its accessibility and liquidity in the market. With this new futures product in the market, crypto exchange Bitnomial is providing traders another avenue to speculate on the XRP’s price which could attract more institutional interest.
The legal clarity around Ripple’s XRP has prompted market observers to speculate on a spot ETF launch. For instance, Nate Geraci, President of ETF Store, recently expressed his anticipation on social media, questioning when the ETF will be launched.
His comments mirror the optimism prevalent in the crypto community. “The upcoming election will essentially determine which party controls the SEC & that can have a real impact on ETFs,” he added.
Why XRP Futures Makes Sense
XRP lawyer Bill Morgan disclosed some key information pertaining to Bitnomial’s recent submission to the US CFTC for the listing of XRP/USD futures trading. The submission shows that the average monthly XRP trade volume exceeds 85 billion on XRP cash markets.
On the other hand, Bitnomial has proposed a spot-month position limit of 300 million XRP, or 3,000 XRP futures contract equivalents, which represents just 0.049% of the total deliverable supply.
This 300 million XRP is equivalent to Ripple’s monthly escrow release which accounts for 0.05% of the total supply which clearly counters the narrative of excess XRP sell-offs. Furthermore, the report states that 61% of XRP is currently in circulation. Besides, Bitnomial holds a US clearinghouse license, further bolstering its position in the market.
It is interesting to consider some information disclosed by Bitnomial in its submission to the CFTC for certification of its listing of XUS (XRP USD Futures).
On average the monthly XRP trade is over 85 billion on XRP cash markets.
Bitnomial proposesa spot month position limit… pic.twitter.com/uEwJak0zlA
— bill morgan (@Belisarius2020) August 14, 2024