XRP ETF Filed With the SEC as Institutional Frenzy for Crypto Funds Heats Up
- Susan SarandonOriginal
- 2024-11-02 07:30:23218browse
Investment firm 21Shares has filed for approval with the U.S. Securities and Exchange Commission (SEC) for a spot exchange-traded fund (ETF) based on XRP
Investment firm 21Shares has filed an application with the U.S. Securities and Exchange Commission (SEC) for a spot exchange-traded fund (ETF) based on XRP, to be named the 21Shares Core XRP Trust.
This move is part of a broader effort to capitalize on the growing demand for financial products linked to cryptocurrencies and to provide investors with a regulated entry point into the XRP market. The ETF will be listed on the Cboe BZX Exchange and held in custody by Coinbase Custody Trust Company, a recognized custodian in the crypto industry.
XRP price sees a slight uptick following 21Shares' announcement
Following the announcement by 21Shares regarding its application for an XRP spot ETF, the value of XRP rose by 1.6%. This occurred on a day when the broader cryptocurrency market was trending downward. XRP's market capitalization exceeded $29.3 billion, and its trading volume increased by 35.5%, reaching over $1.3 billion.
Several firms have been competing to launch crypto ETFs in the United States, especially after the SEC approved the first ETFs of this type in early 2024. In January, eleven spot Bitcoin ETFs entered the market, and eight Ethereum ETFs were approved by the SEC soon after.
21Shares joins institutional push for crypto ETFs
Other companies have also filed for ETFs linked to less mainstream cryptocurrencies, such as the Solana ETF proposed by VanEck in June and the Litecoin ETF filed last month by Canary Capital. This marks a shift in the approach of financial institutions to integrate digital assets into traditional markets.
Despite the anticipation surrounding a potential XRP ETF, its approval is not guaranteed, especially considering the ongoing legal battle between the SEC and Ripple, the issuer of the cryptocurrency.
SEC's legal conflict with Ripple over XRP classification
The SEC has alleged that Ripple raised $1.3 billion through sales of XRP, which the SEC claims should have been registered as a security. The legal dispute has resulted in mixed court rulings. In one decision, U.S. District Judge Analisa Torres ruled that XRP's programmatic sales through a blind bidding process did not violate securities laws, while other direct sales to institutional investors were deemed to be securities. As a result, Ripple was fined $125 million, and both Ripple and the SEC are appealing aspects of this ruling.
The interest of 21Shares and other firms, such as Canary Capital and Bitwise, in an XRP ETF highlights the increasing institutionalization of the crypto market, despite the challenges posed by regulatory frameworks. The lack of clear U.S. cryptocurrency regulations continues to introduce uncertainty into the market, but 21Shares' initiative could pave the way for new developments with the necessary approvals.
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