Bitwise Asset Management has submitted an application for a spot XRP exchange-traded fund (ETF) to the US Securities and Exchange Commission. The filing marks the first of its kind for the cryptocurrency. It aims to provide institutional investors exposure to XRP through traditional securities markets.
The asset manager filed Form S-1 for its Bitwise XRP ETF. This initial step mirrors recent successful applications for Bitcoin and Ethereum ETFs. Bitwise's proposal would directly hold XRP tokens. The fund's launch remains contingent on two factors. First, the SEC must deem Form S-1 effective. Second, an exchange must file and receive approval for Form 19b-4, and this form requests a rule change allowing the ETF's listing.
Bitwise cited investor demand as motivation for the filing. "XRP is an enduring crypto asset that many investors want exposure to," the company stated. Bitwise already manages spot Bitcoin and Ethereum ETFs.
The application's timing is significant. It follows a ruling by Judge Analisa Torres that XRP is not inherently a security.
However, the SEC's stance remains unclear.
Market experts have weighed in on approval chances. Bloomberg analyst Eric Balchunas and ETF Store President Nate Geraci suggest approval is unlikely before US elections. Alex Thorn of Galaxy Digital sees approval odds dropping to zero if the SEC appeals its Ripple case.
The SEC has indeed filed a notice of appeal in its Ripple lawsuit. This move challenges either Judge Torres' XRP ruling or the $125 million penalty against Ripple. The appeal introduces fresh uncertainty to the XRP ecosystem.
Ripple CEO Brad Garlinghouse had anticipated more ETF filings following Bitwise's application. The SEC's appeal may dampen such enthusiasm in the short term. The ongoing legal battle casts a shadow over XRP's regulatory status, and it also raises questions about the viability of XRP-based financial products in the US market.
As the case heads to appeal, the crypto industry watches closely. The outcome could have far-reaching implications for XRP and the broader digital asset landscape.