Why XRP Is Dropping After SBI’s Historic Japan ETF Application

XRP Price Drops Despite SBI's Groundbreaking XRP ETF Filing in Japan

In a groundbreaking move, SBI Holdings has officially submitted an application to launch Japan's first XRP-based exchange-traded fund (ETF). This marks a significant milestone in the country's cautious but evolving approach to cryptocurrency regulation. However, despite this positive development, XRP’s market price has taken a downturn, leaving investors and analysts questioning the apparent contradiction between the news and the market’s reaction.

SBI Holdings Takes Bold Steps in Japan’s Crypto ETF Market

SBI Holdings, a financial services giant in Japan and one of Ripple’s most prominent allies in Asia, announced the filing of two new crypto ETFs. One of the proposed funds is a hybrid ETF that allocates over 51% of its holdings to gold, while the remainder is split between Bitcoin and XRP. The second ETF is a pure-play crypto ETF focusing solely on digital assets. If approved, the XRP-focused ETF would become the first regulated product of its kind in Japan, a country traditionally known for its conservative financial oversight.

Source: X

The filing was publicly shared by crypto influencer John Squire on the social platform X (formerly Twitter), where he detailed the regulatory proposal submitted by SBI. Market observers are now anticipating that this could pave the way for broader institutional adoption of altcoins in Japan.

Ripple-SBI Partnership Expands

SBI Holdings has long maintained a strategic partnership with Ripple, leveraging the latter’s blockchain technology to facilitate cross-border payments across Asia. With this ETF application, SBI is signaling a deepening commitment to expanding altcoin usage among institutional investors. This development is part of SBI’s Q2 2025 growth initiative aimed at enhancing Japan’s presence in the global crypto market.

Should the ETF gain regulatory approval, it would provide Japanese investors with a regulated, secure, and transparent method to gain exposure to XRP and other cryptocurrencies. More importantly, it could open the door for similar ETF filings from other major financial institutions.

Currently, no XRP ETF has received approval in the United States. Several major firms, including Grayscale, ProShares, WisdomTree, 21Shares, Bitwise, and CoinShares, are still awaiting decisions from the U.S. Securities and Exchange Commission (SEC). Japan’s potential greenlight could position the country as a leader in altcoin ETF innovation.

Expanding into the Stablecoin Ecosystem

SBI Holdings is not limiting its ambitions to ETFs alone. The firm has also unveiled plans to venture into the stablecoin sector. The company aims to integrate Ripple’s new USD-backed stablecoin, RLUSD, into Japan’s financial system. Additionally, SBI is collaborating with Circle, the issuer of USDC, to bring the stablecoin into the Japanese market.

These efforts are designed to enhance the speed and cost-efficiency of cross-border payments, particularly between Japan and the United States. However, one key hurdle remains: current Japanese financial regulations restrict crypto transfers to under ¥1 million. This cap limits the full potential of blockchain-based remittance solutions. SBI has reportedly initiated talks with regulators to revise these restrictions, believing that easing the limit could further accelerate Japan’s standing in global digital finance.

Market Confusion as XRP Price Falls

Despite the bullish news from SBI Holdings, XRP’s price has experienced a sharp decline. As of this morning, XRP was trading at $2.93, reflecting a 5% drop. The token had previously climbed to $3.10 earlier this week but has since fallen to a low of $2.75 before a slight recovery.

Analysts attribute this drop to a combination of technical and behavioral factors. The Tom DeMark Sequential—a tool used by traders to identify market exhaustion—flashed a sell signal on XRP’s 3-day chart. Meanwhile, on-chain analytics provided by Ali Martinez show that whales have offloaded more than 720 million XRP tokens in the past several days.

Technical analysis indicates that $2.80 serves as a fragile support level. A more solid floor may not be found until the price approaches $2.48. Despite this bearish trend, bullish analysts maintain that XRP could still surge to $5 or even $10, contingent upon key events set to unfold later this month.

The Ripple vs SEC Case Looms Large

Much of XRP's short-term and long-term pricing depends on the outcome of the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC). A favorable ruling for Ripple could trigger a renewed investor rally, possibly pushing XRP toward the $10 mark. Conversely, a negative decision might spell further losses.

Source: X

This legal case is now seen as a landmark event in the broader crypto industry, with potential implications for how cryptocurrencies are classified and regulated in the United States. With ETF applications piling up and legal pressure mounting, the next few weeks could prove pivotal.

Looking Ahead: Japan’s Role in the Crypto Landscape

Japan’s potential approval of the first XRP ETF is not just a regional milestone—it could signal a major turning point in the global regulatory conversation around digital assets. By stepping forward while other nations hesitate, Japan could attract new investment and position itself as a safe yet progressive hub for crypto innovation.

SBI Holdings’ multifaceted strategy—from ETFs to stablecoins—demonstrates a clear vision for integrating blockchain into traditional finance. While the market reaction may not immediately reflect this optimism, long-term investors are likely to keep a close eye on regulatory developments in both Japan and the U.S.

For now, the crypto community awaits the twin catalysts of the Ripple vs SEC case outcome and the potential approval of the XRP ETF in Japan. Either of these events—or both—could dramatically alter the current price trajectory of XRP and reshape the altcoin investment landscape in Asia and beyond.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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