Following the significant interest in Bitcoin and Ether, there has been a growing momentum among companies seeking to establish spot exchange-traded funds (ETFs) for XRP on US stock exchanges. A notable recent development is the submission of an application to the Securities and Exchange Commission (SEC) to convert an XRP Trust into an ETF.
If the SEC grants approval, the XRP ETF would be introduced on the New York Stock Exchange (NYSE).
Prior endeavors in the crypto sector demonstrate a strategic approach. Previously, the investment manager transitioned its Bitcoin and Ethereum trusts into publicly traded ETFs, and it is now pursuing a similar path with XRP. The XRP Trust operates as a statutory trust in Delaware and currently manages more than $16 million in XRP assets. The envisioned ETF will primarily hold XRP, aiming to track its price movements while factoring in operational costs, thus providing investors with direct access to XRP’s market performance.
In addition to this initiative, other firms like CoinShares and Bitwise have also taken steps to file for XRP-related ETFs. These companies have submitted S-1 filings to the SEC, but the regulatory body is still in the process of making determinations. There is also momentum building behind the approval of other spot ETFs linked to different cryptocurrencies, including Solana and Dogecoin.
The rising number of ETF applications comes in the wake of previous SEC actions. After several years of deliberation, the SEC’s approval of 11 spot Bitcoin ETFs helped pave the way for the acceptance of additional crypto derivatives in the mainstream market. This momentum continued shortly after with the sanctioning of spot Ether ETFs, indicating increasing openness towards various crypto assets.
In the case of XRP, the ongoing saga with the SEC has been particularly intricate. The regulatory body contended that XRP operates as an unregistered security. Nevertheless, a court ruling acknowledged the legitimacy of XRP offerings to retail clients, although the company faced penalties regarding its institutional sales, amounting to $125 million in fines. The SEC has since appealed this decision, seeking a larger penalty.
Amidst these developments, the outlook for the crypto industry is reportedly optimistic, particularly under a new presidential administration. Recent comments by Ripple Labs’ leadership suggest that the establishment of a spot XRP ETF could become a reality soon.
With changes in SEC leadership, analysts anticipate a shift in enforcement strategies, potentially easing the regulatory landscape previously led by Gary Gensler. Furthermore, Ripple has made progress on the licensing front by acquiring additional Money Transmitter Licenses from both New York and Texas.
Overall, as companies continue to strive for the approval of spot XRP ETFs and other cryptocurrencies, the evolving regulatory climate appears more promising for the long-term establishment of such innovative financial products in the marketplace.