Concerns are being raised by analysts about the potential impact of XRP Futures on the price of XRP. While some see it as a step towards wider adoption, others caution that cash-settled futures could create opportunities for market manipulation, potentially resulting in a significant price drop similar to what has been seen in the past with Bitcoin (BTC) and Ethereum (ETH).

This discussion has emerged following the recent launch of XRP futures contracts by the Chicago Mercantile Exchange (CME) on May 19.

The introduction of XRP Futures has sparked a debate over how it might influence the price. An analyst known as Pumpius, shared views on X saying that XRP Futures could be seen as a potential "trap." He highlighted concerns that these financial tools could enable large entities to manipulate prices through tactics like naked shorting and rehypothecation.

Pumpius explained that with naked shorting, institutional players can take significant short positions on XRP without owning the tokens, generating artificial selling pressure that can push down the price. The analyst also pointed out that whales often strategically time their short positions around CME futures expirations to profit from price declines. Drawing parallels from Bitcoin, Pumpius noted that BTC typically saw a 2.3% decrease around previous CME futures expirations.

Moreover, Pumpius touched upon the concept of rehypothecation, whereby one XRP deposit can support multiple short positions, increasing market leverage and potential impact on price movements.

Based on historical data, another analyst named AJ Sallen recalled previous instances where the launch of futures contracts for Bitcoin and Ethereum had caused notable price drops due to shorting and profit-taking strategies.

Despite these apprehensions, some are hopeful that XRP Futures could enhance liquidity and could pave the way for the approval of a spot XRP ETF.

Currently, there hasn’t been a significant decline in XRP's price. Recent data from BeInCrypto indicates that the altcoin has actually risen by 2.1% in the past day, with its trading price at $2.3 at the time of writing.