Bitwise has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) for what could become the first exchange-traded fund (ETF) based on XRP, as announced in a recent statement on October 2.
This ETF aims to directly hold XRP and is awaiting the activation of its Form S-1 registration along with approval of Form 19b-4.
Building upon its previous successes with Bitcoin and Ethereum ETFs launched earlier this year, Bitwise looks to expand its offerings in the cryptocurrency space.
Why Is Bitwise Targeting an XRP ETF?
Bitwise chose to pursue an XRP ETF due to several compelling factors:
- Facilitates Cross-Border Payments: XRP’s technology is designed to enhance international transactions.
- Robust Ecosystem: The XRP Ledger (XRPL) encourages institutional involvement in decentralized finance (DeFi).
- Ethereum Compatibility: XRPL’s compatibility with the Ethereum Virtual Machine (EVM) enhances its usability.
- Active User Base: XRP boasts millions of active wallets, reinforcing its status as a leading cryptocurrency.
CEO Hunter Horsley expressed optimism about blockchain’s potential to create innovative financial assets, stating:
“Over the last seven years, we have enabled investors to explore opportunities in this sector, and we are thrilled to advance our mission with the submission of the Bitwise XRP ETP.”
Ripple’s CEO, Brad Garlinghouse, remarked that this ETF application represents increased trust from traditional financial institutions in XRP:
“This development highlights the growing integration of digital assets like XRP into mainstream finance, signaling a pivotal point in the cryptocurrency industry. I believe this is just the beginning.”
Interestingly, this application follows closely on the heels of Grayscale Investments launching an XRP-focused crypto investment trust less than a month ago.
Chances of Approval for the ETF
Market analysts remain skeptical regarding the approval of the XRP ETF, particularly given the current U.S. regulatory landscape.
The ongoing legal challenges faced by Ripple against the SEC complicate matters further. Alex Thorn, Head of Research at Galaxy Digital, commented:
“The SEC has a deadline to appeal Judge Torres’ ruling on XRP sales by October 7. If they do appeal, the likelihood of this ETF gaining approval diminishes significantly.”
Conclusion
As the cryptocurrency landscape continues to evolve, the fate of Bitwise’s XRP ETF application hangs in the balance, reflecting the complex interplay between innovation in the crypto market and regulatory challenges. Stakeholders and investors will be closely monitoring the SEC’s decisions in the coming weeks.
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