XRP Market Manipulation at the Forefront of Cyber Hornet’s ETF Filing

On September 29, Cyber Hornet brought attention to potential market manipulation risks associated with XRP in its ETF filing to the U.S. Securities and Exchange Commission (SEC). The application seeks approval for the S&P 500 and XRP 75/25 Strategy Exchange-Traded Fund (ETF), which allocates 75% of its assets to the S&P 500 and 25% to XRP.

Whale Influence on XRP’s Price Dynamics

In the filing, Cyber Hornet highlighted concerns over the significant influence that large XRP holders, referred to as “whales,” wield in shaping the asset’s market price. The document further detailed XRP’s creation and allocation process, a factor flagged as a risk for potential investors. Of the 100 billion XRP generated during the launch of the XRP Ledger, 20 billion were allocated to Ripple Labs’ founders while the remaining 80 billion were reserved for Ripple Labs itself.

This concentrated distribution amplifies the concerns surrounding price manipulation, given the outsized influence these major stakeholders could potentially exert. While XRP’s early issuance details are well-documented, their inclusion in a regulated ETF filing has amplified discussions about transparency and investor protection. Legal expert Bill Morgan weighed in, noting, “Highlighting whale-driven market manipulation in an ETF filing elevates this concern to a legitimate investment risk that regulators and investors must consider.”

Institutional Interest vs. Market Manipulation Debate

Reactions to the filing within the crypto community have been mixed. While some XRP supporters argue that such references to risks are industry-standard across traditional and crypto-focused financial products, others see this as an overemphasis on an already well-known issue. Optimists suggest that institutional adoption and increased investment activity could outpace concerns linked to whale-driven price anomalies, potentially stabilizing the market.

The proposed ETF is one of three filings submitted by Cyber Hornet on September 26. The other two focus on S&P 500 and Ethereum (ETH) 75/25 Strategy ETF, as well as S&P 500 and Solana (SOL) 75/25 Strategy ETF. All filings include a section addressing the risks unique to these respective cryptocurrencies. The explicit acknowledgment of such risks demonstrates a growing trend of regulatory scrutiny over digital asset inclusion in traditional financial instruments.

XRP's Current Market Performance

Amid these developments, XRP showed modest gains on the day, rising 1.3% to reach $2.82. Its market capitalization has climbed to $169.2 billion, supported by a 24-hour trading volume of $3.16 billion. Despite the uptick, market conditions remain cautiously volatile, with investors closely monitoring external factors such as regulatory advancements, institutional sentiment, and market manipulations driven by large stakeholders.

Broader Implications for the Cryptocurrency Industry

Cyber Hornet’s ETF filing not only sheds light on the specific risks tied to XRP but also underscores a broader trend of integrating cryptocurrencies into traditional investment vehicles. By openly acknowledging risks like whale activity in regulatory filings, the crypto sector may witness tighter scrutiny and more transparency, which could bolster institutional confidence over time.

Whether institutional participation in XRP through ETFs will minimize the impact of major holders or exacerbate the challenges remains a key question. For now, investors and market analysts alike are keeping a close eye on XRP’s trajectory as regulatory and market forces interact in this ever-evolving space.