Asset manager Bitwise recently submitted a filing for an XRP exchange-traded fund (ETF) to Delaware’s Division of Corporations on Sept. 30. This filing includes the registration for establishing a Delaware statutory trust, which is a business-oriented trust legally recognized in the state. Companies like Bitwise, BlackRock, and Fidelity first registered trust entities for Bitcoin (BTC) and Ethereum (ETH) 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. This move by Bitwise indicates a potential XRP ETF launch in the future.
Grayscale also revealed plans to launch an XRP Trust investment product, 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, which accused 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 paved the way for US exchanges to relist XRP and allowed companies like Grayscale to develop new XRP-related investment products. However, the regulatory landscape for cryptocurrencies remains unpredictable, and an XRP ETF would need to comply with SEC regulations, which have shown a cautious approach towards crypto ETFs.
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, suggesting that investors would appreciate this financial instrument for the diversification it provides. Garlinghouse stated in a Bloomberg interview that an XRP ETF makes sense and compared it to the earliest days of the stock market when investors looked to diversify risk. He believes that investors will see other ETFs in the future as the market evolves.
The potential launch of an XRP ETF follows the footsteps of Bitcoin and Ethereum, which already have ETFs listed and traded based on their underlying assets. Companies like Bitwise, BlackRock, and Fidelity are leading the way in registering trust entities for various cryptocurrencies, including XRP. The settlement of the legal dispute between Ripple Labs and the SEC has cleared the path for companies like Grayscale to develop investment products related to XRP. However, the future of an XRP ETF depends on regulatory approvals and compliance with SEC regulations.
While the cryptocurrency market continues to face regulatory uncertainties, the interest in ETFs based on digital assets is growing. With companies like Bitwise filing for an XRP ETF and Grayscale planning to launch an XRP Trust investment product, the market for crypto ETFs is expanding. Ripple CEO Brad Garlinghouse’s support for an XRP ETF further highlights the potential benefits of diversification for investors. As the industry evolves, the emergence of new investment products based on cryptocurrencies like XRP could provide additional opportunities for investors to participate in the digital asset space.
