Following the trend of Bitcoin and Ether, there is a growing interest from companies to launch spot XRP exchange-traded funds (ETFs) on US stock exchanges. Recently, an application was filed with the Securities and Exchange Commission (SEC) to transform an XRP Trust into an ETF.
If this application is successful, the XRP ETF will be available on the New York Stock Exchange (NYSE).
A STRATEGIC MOVE IN ETF DEVELOPMENT
This development mirrors previous actions taken by the crypto asset management firm, which has already converted its Bitcoin and Ethereum investment trusts into ETFs listed on public exchanges. Now, attention has turned towards XRP.
The XRP Trust has been structured as a Delaware statutory trust, currently managing assets exceeding $16 million in XRP. The proposed ETF aims to primarily hold XRP, allowing it to track price performance while addressing operational fees, providing investors direct exposure to market movements related to XRP.
In addition to this application, other firms such as CoinShares and Bitwise have also filed for XRP-oriented ETFs. Though these companies have submitted their S-1 filings to the SEC, a decision from the regulator is still pending. Furthermore, several companies are advocating for spot ETFs related to other cryptocurrencies like Solana and Dogecoin.
AN INCREASE IN APPLICATIONS FOR ETFs
Historically, the SEC has taken considerable time to approve spot Bitcoin ETFs; however, once they approved 11 such ETFs collectively, there was a notable surge in mainstream crypto investment products. Following this momentum, there was also a swift approval for spot Ether ETFs, prompting further exploration into additional cryptocurrency ETFs.
The token associated with Ripple has faced significant scrutiny and legal challenges from the SEC regarding its classification as an unregistered security. While a court determined that offers to retail consumers were valid, it found that institutional offerings were not compliant with US regulations, resulting in a fine of $125 million. The SEC has contested this court ruling, pushing for a higher penalty.
Optimism is growing within the crypto sector as expectations rise for more progressive regulations with a new administration in place. Recently, a statement was made suggesting that a spot XRP ETF might “soon be a reality” under the current US administration.
Additionally, with changes in leadership at the SEC, including the departure of its previous chair, there is speculation that the regulatory body might ease its stance against Ripple.
As part of its expanding operations, Ripple has also acquired two more Money Transmitter Licenses from states in the US, specifically from New York and Texas.
The growing interest in spot XRP ETFs is indicative of the cryptocurrency market’s evolution, with various entities working to establish a foothold in this emerging area of investment. With several applications in the pipeline, market participants are closely watching for regulatory developments that could significantly influence the future of crypto ETFs.