Fund Managers Launch Filings for XRP Exchange-Traded Funds

Four prominent asset management firms—Canary Capital, WisdomTree, 21Shares, and Bitwise—have recently submitted filings to launch the first spot XRP exchange-traded funds (ETFs) in the United States. This development indicates a significant push within the financial sector to expand investment options in the cryptocurrency market.

Cboe BZX Exchange’s Role

On February 6, 2024, the Cboe BZX Exchange officially submitted 19b-4 filings, which inform the U.S. Securities and Exchange Commission (SEC) about a proposed rule change. Should the SEC approve these submissions, it would pave the way for the first XRP ETFs to be traded in the country. XRP, the digital asset associated with Ripple, is currently the fourth-largest cryptocurrency by market value.

Previously, under former SEC Chair Gary Gensler’s leadership, the Commission granted approval for ETFs based on Bitcoin (BTC) and Ether (ETH) to begin trading at the start of 2024. However, with a new acting chair, Mark Uyeda, who has shown a friendlier stance toward cryptocurrencies, analysts have observed a recent increase in crypto-related ETF filings. This shift seems to reflect the broader trends and expectations regarding a potentially more cryptocurrency-friendly regulatory environment.

Recent Activity in the ETF Landscape

Prior to these filings, on January 28, Cboe BZX also refiled for spot Solana (SOL) ETFs on behalf of Canary, 21Shares, Bitwise, and VanEck, which had faced rejection from the SEC last year. Bitwise was the first to register its XRP ETF application, submitting a Form S-1 in October 2023. This form is a crucial first step in registering a security with the SEC, serving as the foundation for subsequent filings needed for approval.

Following Bitwise, Canary Capital quickly submitted its application for the Canary XRP Trust. Additionally, 21Shares filed for its XRP ETF, known as the 21Shares Core XRP Trust, in November, while WisdomTree submitted its XRP Fund in December. This wave of interest highlights the increasing determination of various fund issuers to capitalize on the growing cryptocurrency market.

In a related move, New York Stock Exchange subsidiary NYSE Arca filed a 19b-4 application on January 30 to convert Grayscale’s existing XRP trust into a spot ETF. Another key player, CoinShares, submitted a Form S-1 for its CoinShares XRP ETF on January 24, 2024.

Market Predictions and Current XRP Status

Financial giant JPMorgan has projected that newly launched spot XRP ETFs could attract between $4 billion and $8 billion in net new assets within their first year. As of now, XRP is trading at approximately $2.34, experiencing a 2% decline in the past 24 hours. In mid-January, XRP nearly approached its all-time high of $3.40, which it reached in January 2018, according to data from CoinGecko.

The anticipated approval of these ETFs reflects the evolving landscape of cryptocurrency investments and the potential for mainstream acceptance of digital assets. As regulatory clarity develops, industry experts and investors remain optimistic about the future growth of cryptocurrency-related financial products.