The markets are cautiously buzzing today after the U.S. Securities and Exchange Commission gave the green light to Grayscale’s Digital Large Cap ETF (GDLC), a move that has significantly boosted the odds of an XRP-spot ETF approval. Analysts now estimate a 95% chance that the SEC will approve dedicated XRP ETFs by the end of the year, marking a potential turning point for Ripple’s native token.

However, things aren’t all rosy for XRP, and even with this regulatory progress, XRP’s price took an annoying dip, down 2.93% on July 1, underperforming the broader crypto market, which saw a more modest 1.8% decline. The drop appears to be driven by lingering uncertainty over the SEC’s next steps in its long-running legal battle with Ripple, as well as broader market hesitancy following $342 million in outflows from Bitcoin spot ETFs.

The SEC’s decision to approve Grayscale’s GDLC ETF is a big development because it marks the first time the regulator has allowed an ETF to hold XRP alongside other major cryptocurrencies like Bitcoin and Ethereum. This sets a crucial precedent, suggesting that the SEC may be softening its stance on digital assets, particularly XRP, which has been at the center of a contentious legal battle since 2020.

Bloomberg ETF analysts, who have a strong track record in predicting SEC decisions, have now raised their odds of an XRP-spot ETF approval to 95%. Their confidence stems from the fact that the GDLC approval demonstrates the SEC’s willingness to allow XRP exposure in regulated investment products. Even prediction markets have reacted quickly, with Polymarket traders increasing the likelihood of an XRP ETF from 77% to 89% in just one day.

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While optimism is high, one big elephant remains in the room: Why hasn’t BlackRock, the world’s largest asset manager, filed for an XRP-spot ETF yet? BlackRock’s iShares Bitcoin Trust (IBIT) has been instrumental in driving billions into the crypto market, so its absence from the XRP ETF race has left some investors cautious.

Many speculate that BlackRock is waiting for the SEC vs. Ripple case to reach a definitive conclusion before making its move. If the SEC officially drops its appeal against Ripple, a possibility that could be decided as early as July 3 in a closed-door meeting, it might trigger a wave of institutional interest, including a potential BlackRock filing.

The legal saga between Ripple and the SEC appears to be nearing its endgame. Last week, Ripple announced it would drop its cross-appeal, putting the focus squarely on the SEC’s next move. If the agency’s commissioners vote to withdraw their appeal against the court’s ruling on XRP’s programmatic sales, it would effectively end the lawsuit and remove a major regulatory overhang for the cryptocurrency.

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Former SEC lawyer Marc Fagel said that even though the process could take weeks, an expedited resolution is possible if both parties cooperate. A decision to drop the appeal would not only bolster XRP’s price but also pave the way for smoother ETF approvals, as regulatory uncertainty has been a key obstacle for institutional investors.

Despite the positive ETF developments, XRP’s price action has been shaky. The token’s recent drop suggests that traders remain wary until the SEC provides clearer signals on its appeal strategy. In the short term, XRP’s trajectory will likely hinge on two factors:

The SEC’s decision on its Ripple appeal – A withdrawal could trigger a rally, while further delays may prolong market anxiety.

Progress on XRP-spot ETF filings – A major player like BlackRock entering the space would be a bullish catalyst.

Technically, XRP needs to hold above key support levels to avoid further declines. A breakout above the 50-day exponential moving average ($2.17) could open the door to a retest of June’s high at $2.33, while a drop below the 200-day moving average might see the price slide toward $1.92. Brace yourselves!

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