The U.S. Securities and Exchange Commission (SEC) has officially acknowledged Bitwise Asset Management’s application to introduce a spot XRP exchange-traded fund (ETF), initiating a review process that could extend up to 90 days. This development signifies a pivotal step toward potentially offering investors regulated exposure to XRP, the native cryptocurrency of the XRP Ledger.
Bitwise submitted the proposal on February 6, 2025, through the Cboe BZX Exchange, aiming to list and trade shares of the Bitwise XRP ETF as a Commodity-Based Trust Share. The SEC’s acknowledgment, dated February 18, 2025, marks the commencement of a comprehensive evaluation period, during which the regulatory body will assess the proposal’s compliance with applicable standards and regulations.
The proposed ETF seeks to provide investors with direct exposure to XRP’s market performance without the complexities associated with self-custody of digital assets. According to the filing, XRP is primarily utilized for facilitating fast and cost-effective cross-border payments, setting it apart from cryptocurrencies like Bitcoin and Ethereum, which are often regarded as stores of value. The document emphasizes XRP’s liquid, decentralized, and resilient market structure, drawing parallels to the characteristics of Bitcoin and Ethereum, both of which have recently seen the approval of spot ETFs by the SEC.
A significant aspect of the filing references the legal precedent set by the SEC’s lawsuit against Ripple Labs, wherein a court determined that Ripple’s programmatic sales of XRP did not constitute securities transactions. This legal context may influence the SEC’s deliberations regarding the ETF proposal.
If approved, the Bitwise XRP ETF would offer a regulated avenue for investors to gain exposure to XRP, potentially enhancing market transparency and accessibility. Trading on a regulated exchange is anticipated to ensure price clarity and facilitate seamless market entry and exit for investors. Additionally, the introduction of such an ETF could foster competitive management fees compared to existing over-the-counter cryptocurrency funds.
This move by Bitwise aligns with a broader trend of financial institutions seeking to integrate digital assets into traditional investment frameworks. The outcome of the SEC’s review will be closely monitored by market participants, as it could have significant implications for the future of cryptocurrency investments within regulated markets.
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