Ripple CEO: ETF Approval Could Unleash Flood of Capital into Cryptocurrency Market

Ripple CEO Brad Garlinghouse believes there will be a flood of new capital pouring into crypto if a spot Bitcoin (BTC) ETF is approved.

“An ETF getting approved could create a lot of capital flowing into the market,” he said in a recent interview with CNBC.

However, the crypto veteran also mentioned that it is hard to balance these positive developments against other macro factors, namely wars in the Middle East and Europe.

“I go back to kinda first principles around big picture,” Garlinghouse added, noting that the crypto industry needs regulatory clarity and “lots of” utility to thrive.

“We need to be solving problems at scale. Not experiments. Not possibilities.”

"An ETF getting approved could create a lot of capital flowing into the market," @bgarlinghouse tells CNBC's @dan_murphy as speculation mounts over a spot Bitcoin ETF approval in the United States. pic.twitter.com/zNtppijYBn

— CNBC Middle East (@CNBCMiddleEast) November 10, 2023

Garlinghouse Mentions Prospects of Tokenization

The crypto boss specifically mentioned the prospects of tokenization and its growing adoption.

According to data accumulated by rwa.xyz, demand for tokenized Treasuries has sharply increased, reaching a staggering $750 million.

It is worth noting that crypto firms and investment funds are showing interest in these products to benefit from higher government bond rates significantly, as the recent market downturn has negatively impacted yields in the crypto lending space.

Currently, the average yield for all tokenized Treasuries stands at 5.24%.

As reported, experts anticipate the market capitalization of tokenized real-world assets (RWAs) could balloon to as much as $10 trillion by the end of the decade.

Likewise, asset management firm Bernstein has estimated that the size of the tokenization opportunity will reach $5 trillion over the next five years. 

Specifically, the firm forecasted a 2% penetration in currency and bank deposits, which could translate into a $2 trillion opportunity in the next five years. It expects another $3 trillion in stablecoins and CBDCs.

Garlinghouse also claimed that he is “extremely optimistic” regarding the future of cryptocurrencies in the next five to 10 years.

BTC Surges on Optimism Around Spot ETF

The optimism around the launch of a spot Bitcoin ETF has fueled the recent rally in crypto markets, which saw the flagship cryptocurrency reach as high as $38,000.

Analysts at financial services firm Cantor Fitzgerald believe the long-awaited spot BTC ETF is inching closer to reality.

The company, known for its prime brokerage and investment banking services, has grown confident in the approval of applications from asset managers seeking to launch a spot ETF for Bitcoin.

The SEC has been hesitant to approve a spot bitcoin ETF due to concerns about potential manipulation on offshore spot platforms.

However, Cantor Fitzgerald believes that the market surveillance procedures proposed by new applicants could address these worries and sway the SEC towards approval.

The firm’s analysts Josh Siegler and Will Carlson emphasized the importance of establishing a “comprehensive surveillance-sharing agreement with a regulated market of significant size” to appease regulators.