The cryptocurrency market is experiencing a pivotal week as regulatory developments take center stage—particularly for XRP and Bitcoin (BTC). While Bitcoin faces short-term pressure due to macroeconomic headwinds, XRP is capturing investor attention following a major regulatory breakthrough that has significantly boosted the odds of an XRP spot ETF approval.
XRP-Spot ETF Approval Odds Jump to 95%
Recent developments suggest that the chances of an XRP spot ETF being approved by the U.S. Securities and Exchange Commission (SEC) have surged to 95%, according to market analysts and on-chain data trackers. This dramatic shift follows the SEC’s unexpected greenlighting of the Grayscale Digital Large Cap Fund (GDLC), which includes XRP among its holdings.
This move marks a significant policy reversal, as the SEC had previously maintained that XRP was a security. By allowing GDLC to hold XRP without legal challenge, the agency appears to have tacitly acknowledged XRP’s status as a non-security—or at least not one that violates federal securities laws in this context.
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Legal experts interpret this as a strong signal that the SEC may be softening its stance ahead of potential broader market reforms. The GDLC precedent sets a critical benchmark: if XRP can be included in a regulated investment vehicle without objection, it strengthens the case for a dedicated spot ETF.
Market sentiment has reacted swiftly. XRP price volatility has decreased, while institutional trading volume has spiked—both indicators typically associated with growing confidence in regulatory clarity.
Why the GDLC Decision Matters
The Grayscale Digital Large Cap Fund (GDLC) is designed to track the performance of top-tier digital assets, including BTC, ETH, and now XRP. Unlike Grayscale’s single-asset trusts like GBTC, GDLC operates under a different regulatory framework that allows for more flexibility in asset inclusion.
When the SEC did not object to XRP’s inclusion in GDLC within the required review window, it effectively allowed the fund to proceed—what many legal analysts call a "de facto approval."
This outcome suggests:
- The SEC may no longer view XRP as an unregistered security in all contexts.
- A pathway exists for other financial institutions to include XRP in compliant products.
- The legal precedent strengthens Ripple Labs’ ongoing defense in its long-standing lawsuit with the SEC.
Legal scholar and crypto policy analyst Maria Liu noted:
“This isn’t just about one fund—it’s about signaling. The SEC’s silence speaks volumes. It shows they’re willing to adapt their enforcement posture based on market evolution.”
Such developments significantly increase the likelihood of a standalone XRP spot ETF, especially if major asset managers like BlackRock or Fidelity file formal applications in the near future.
Bitcoin Dips Amid Tax Disappointment and ETF Outflows
While XRP gains momentum, Bitcoin experienced a pullback, dropping below $106,000 amid growing concerns over U.S. crypto tax policy and cooling institutional demand.
On July 1, Bitcoin fell 1.33%, following a 1.09% decline the previous day, closing at $105,743. The drop comes after hopes for favorable crypto tax amendments were dashed with the passage of the One Big Beautiful Bill Act (OBBB), which excluded proposed changes to how staking and mining rewards are taxed.
Senator Cynthia Lummis, a vocal advocate for crypto-friendly legislation, expressed disappointment:
“For years, miners and stakers have been taxed TWICE. Once when they receive block rewards, and again when they sell it. It’s time to stop this unfair tax treatment and ensure America is the world’s Bitcoin and Crypto Superpower.”
Without reform, many investors fear increased compliance burdens and reduced profitability for passive income strategies like staking.
U.S. Bitcoin ETFs See Massive Outflows
The lack of legislative progress coincided with a reversal in U.S. Bitcoin spot ETF flows. After a historic 16-day streak of net inflows, the market saw significant outflows on July 1:
- Fidelity Wise Origin Bitcoin Fund (FBTC): $172.7 million outflow
- Grayscale Bitcoin Trust (GBTC): $119.5 million outflow
- ARK 21Shares Bitcoin ETF (ARKB): $27 million outflow
- Bitwise Bitcoin ETF (BITB): $23 million outflow
With BlackRock’s iShares Bitcoin Trust (IBIT) data pending, total outflows reached $342.2 million, signaling a shift in investor sentiment.
Experts attribute this to a combination of profit-taking after recent highs and caution surrounding Federal Reserve policy.
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Fed Policy Uncertainty Weighs on Crypto Markets
Federal Reserve Chair Jerome Powell maintained a cautious tone during his July 1 remarks, declining to commit to any specific timeline for interest rate cuts:
“Not going to rule in or rule out any particular meeting. Officials will be monitoring, particularly, what does show up in terms of inflation or what does not show up.”
Powell also warned that ongoing tariff policies could reignite inflationary pressures—bad news for risk assets like Bitcoin, which tend to perform better in low-rate environments.
Market watchers now expect the next Fed decision to hinge on upcoming CPI and employment data. Until then, volatility is likely to persist across digital asset markets.
Bitcoin Price Outlook: Key Drivers Ahead
The near-term trajectory of BTC will depend on several interrelated factors:
Bearish Scenario
A confluence of easing trade tensions, legislative gridlock, hawkish Fed signals, weak economic data, and sustained ETF outflows could push Bitcoin toward its 50-day EMA, potentially testing the $100,000 psychological support level.
Bullish Scenario
Conversely, renewed geopolitical tensions, bipartisan momentum for crypto bills, dovish Fed commentary, strong macro data, and renewed ETF inflows could propel BTC back toward its all-time high of $111,917.
Technical indicators remain neutral-to-positive, with long-term holders continuing to accumulate despite short-term fluctuations.
FAQ: Your Top Questions Answered
Q: Why did XRP ETF odds jump to 95%?
A: Because the SEC allowed XRP to be included in Grayscale’s GDLC fund without objection—setting a regulatory precedent that suggests XRP may not be classified as a security in certain investment contexts.
Q: Is an XRP spot ETF guaranteed now?
A: Not guaranteed, but highly probable. The GDLC approval removes a major legal barrier. A formal ETF filing would still require SEC review, but the path is clearer than ever before.
Q: Why did Bitcoin drop below $106K?
A: Due to disappointment over missing crypto tax reforms, combined with Fed policy uncertainty and a sudden reversal in ETF flows after 16 days of inflows.
Q: Could BTC fall to $100K?
A: Yes, if bearish conditions persist—especially continued ETF outflows and hawkish Fed rhetoric. However, strong support exists around that level from long-term investors.
Q: What’s next for crypto regulation?
A: Watch for new legislative proposals in Congress, SEC guidance on token classification, and potential ETF applications for altcoins like XRP and ADA.
Q: How can I stay ahead of market shifts?
A: Monitor on-chain data, ETF flow reports, regulatory announcements, and macroeconomic indicators like inflation and interest rate expectations.
Final Thoughts: A Turning Point for Crypto?
The events of early July 2025 may mark a turning point in U.S. crypto policy. For XRP, the door to mainstream financial integration is opening wider than ever. For Bitcoin, short-term turbulence is testing resilience—but underlying fundamentals remain strong.
As institutional adoption grows and regulatory clarity improves, digital assets are increasingly becoming part of the global financial infrastructure.
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