Bitwise has filed an application with the U.S. Securities and Exchange Commission (SEC) for the first spot XRP exchange-traded fund (ETF), according to an October 2 release.
The proposed ETF aims to directly hold XRP. It is currently awaiting the effectiveness of its registration on Form S-1 and approval of Form 19b-4.
Bitwise’s XRP ETF would build on the company’s success with other crypto-based funds, including the Bitcoin and Ethereum spot ETFs launched earlier this year.
Why an XRP ETF?
Bitwise said it chose XRP because of its ability to facilitate cross-border payments and its strong ecosystem. The company highlighted that the XRP Ledger (XRPL) supports institutional participation in DeFi and offers compatibility with the Ethereum Virtual Machine (EVM).
The company also highlighted XRP’s large number of active wallets and its status as one of the world’s leading cryptocurrencies.
Hunter Horsley, CEO of Bitwise, highlighted the company’s belief that blockchains will create new apolitical monetary assets and permissionless applications for the 21st century. He added:
“Over the past seven years, we have helped investors access opportunities in the space, and we are excited to continue that work with our filing of a Bitwise XRP ETP.”
Ripple CEO Brad Garlinghouse also spoke, saying the app demonstrates traditional financial institutions’ growing confidence in XRP. He declared:
“This move highlights the growing trust and integration of digital assets like XRP into traditional finance, marking the continued adoption and maturation of the crypto market. I feel like this is just the beginning.
Notably, this development comes less than a month after Grayscale Investments launched a new crypto investment trust focused on XRP.
Will it be approved?
Market analysts have expressed doubts whether the XRP ETF will be approved under the current US regulatory framework.
Additionally, the ongoing legal battle between Ripple and the SEC further complicates the approval process. Alex Thorn, Head of Research at Galaxy Digital, said:
“The SEC has until next week (October 7) to appeal Judge Torres’ July 2023 decision (which ruled that secondary sales of XRP through exchanges were not securities). This ETF deposit results drops to near zero if they appeal (I’ll be very surprised if they don’t appeal).
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Assad Jafri
AJ, a passionate journalist since the 2011 Arab Spring in Yemen, has honed his skills around the world for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
