Cryptocurrency asset manager Bitwise recently submitted a filing for an XRP exchange-traded fund (ETF) to Delaware’s Division of Corporations on September 30. This filing includes the registration for establishing a Delaware statutory trust, which is legally recognized in the state. Companies like Bitwise, BlackRock, and Fidelity first registered trust entities for Bitcoin and Ethereum before filing to list and trade ETF shares based on these cryptocurrencies. Registering a trust entity is the initial step toward filing for an ETF listing and trading.
Grayscale revealed plans to launch an XRP Trust investment product last month, with the potential to convert it into an XRP ETF in the future. In 2021, Grayscale had to shut down its previous trust due to the SEC’s lawsuit against Ripple Labs, accusing Ripple of selling XRP as an unregistered security. However, the legal dispute ended earlier this year, with Ripple settling with the SEC for $200 million. The resolution of XRP’s regulatory status has allowed US exchanges to relist XRP and companies like Grayscale to develop new XRP-related investment products.
Despite the positive developments, the regulatory landscape for cryptocurrencies remains unpredictable. For an XRP ETF to become a reality, it would have to comply with SEC regulations, which have shown a cautious approach towards crypto ETFs, particularly in light of previous disputes over XRP’s classification as a security with Ripple. XRP was last down 2.7% to $0.60 on Wednesday, reflecting a wider slump in the cryptocurrency market influenced by escalating tensions between Iran and Israel.
Ripple CEO Brad Garlinghouse has voiced his support for an XRP ETF in the past. He suggested that investors would appreciate this financial instrument for the diversification it provides. In a Bloomberg interview earlier this year, Garlinghouse stated, “I think it only makes sense. There will be other ETFs too. It’s a little like the earliest days of the stock market. You don’t really want exposure to one stock, or one company. You want to typically think about diversifying risk… and so I think we will see other ETFs.”
In conclusion, the recent filing for an XRP ETF by Bitwise and the potential launch of an XRP Trust investment product by Grayscale signal growing interest in offering investment opportunities related to XRP. While the resolution of XRP’s regulatory status has cleared the path for these initiatives, compliance with SEC regulations remains a key factor in determining the success of an XRP ETF. The cryptocurrency market continues to face regulatory challenges and uncertainties, but the development of new investment products indicates a growing acceptance and adoption of digital assets in the traditional financial industry. Investors will be watching closely for further developments in the crypto ETF space.
