Will XRP Futures Ignite a Financial Fiasco? Analysts Sound the Alarm! 🚨

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In the grand theater of finance, where the stakes are as high as the ambitions of its players, analysts are voicing their apprehensions regarding the newly minted XRP Futures. While some herald this as a noble stride towards mainstream acceptance, others, with a twinkle of skepticism, caution that these cash-settled futures might just be the harbinger of market manipulation, potentially leading to a price plunge reminiscent of the tumultuous tales of Bitcoin (BTC) and Ethereum (ETH).

This lively discourse unfolds in the wake of the Chicago Mercantile Exchange (CME) unveiling its XRP futures contracts on the fateful day of May 19.

How Will XRP Futures Impact The Price?

In a recent missive on X (formerly Twitter), an analyst, who goes by the whimsical moniker Pumpius, cautioned that XRP Futures could be a “trap.” He emphasized that these financial contraptions grant the titans of finance the power to orchestrate price manipulations through the artful practices of naked shorting and rehypothecation. Ah, the joys of modern finance! 🎩

“You desired legitimacy. Wall Street bestowed upon you leverage. It’s the same script used to manipulate gold and silver for ages. No need to offload coins. Just inundate the market with ghostly contracts, suppress the price, and revel in the decay,” Pumpius quipped.

The analyst elaborated that in the realm of naked shorting, institutional behemoths can establish colossal short positions on XRP without even possessing the tokens. This conjures an artificial sell pressure, which, like a well-placed joke, can deflate the price.

Moreover, he noted that the whales of the sea—those crafty traders—often synchronize their short positions with the CME futures expirations. This, in turn, orchestrates a price decline while they bask in the glow of profit. He cited Bitcoin as a prime example, revealing that it typically dipped about 2.3% around previous CME futures expirations. Quite the coincidence, wouldn’t you say?

“Now apply that to XRP: Each CME expiration transforms into a potential bear raid window. Astute traders will soon find themselves more engrossed in CME calendars than in charts,” he added, with a knowing smile.

In addition to naked shorting, our analyst friend also delved into the murky waters of rehypothecation. In this curious practice, a single XRP deposit can underwrite multiple short positions, amplifying the leverage in the market like a magician pulling rabbits from hats.

This could lead to additional hidden pressures on the price, as the visible supply of XRP remains unchanged while the leverage behind these positions multiplies like rabbits in spring. These combined strategies suggest that XRP’s price could face significant drops, particularly around futures expirations. Oh, the drama!

“Naked short selling is legal in futures. Rehypothecation is legal in traditional finance. Dark pool trading and borrowed liquidity are standard institutional tools. So when XRP volatility spikes near futures expiry, it won’t be random. It’ll be precision finance, masquerading as market behavior,” Pumpius asserted, with a flourish.

Historical data lend credence to these concerns. Another analyst, AJ Sallen, revealed that when the CME introduced Bitcoin futures on December 18, 2017, BTC’s price initially soared to $19,783. Yet, like a balloon losing air, it plummeted to $13,800 by December 22, marking a staggering 30% decline. Quite the rollercoaster ride!

A similar saga unfolded with the launch of CBOE Ethereum futures in 2018, where prices took a nosedive. 🎢

“Futures enabled shorting, and profit-taking after the hype caused a correction,” Sallen remarked, shaking his head.

Despite these ominous clouds, many remain optimistic that XRP Futures will usher in a new era of liquidity and pave the way for a spot XRP ETF approval. Hope springs eternal, doesn’t it?

“CFTC-regulated contracts on XRP. Spot XRP ETFs are merely a matter of time,” Nate Geraci, President of the ETF Store, commented, with a wink.

For the moment, XRP’s price has not suffered any major decline. BeInCrypto data revealed that the altcoin rose 2.1% over the past day. At press time, XRP’s trading price was $2.3. A curious twist in this unfolding tale!

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2025-05-20 15:46