Bitwise, a leading crypto fund manager, has recently submitted a filing for a spot exchange-traded fund (ETF) that would allow for direct exposure to XRP. This filing has been submitted to Delaware’s Department of State, and Bitwise Chief Investment Officer Matthew Hougan has confirmed the news. While further details are anticipated, this filing could represent a significant milestone for XRP investors.
Regulatory Challenges Ahead
XRP ETFs have been a topic of much discussion for quite some time, with many analysts predicting that they could become the next big thing following ETH ETFs, potentially hitting the market by 2025. However, it is important to note that the U.S. Securities and Exchange Commission (SEC) has never approved a spot XRP ETF. If Bitwise’s proposal progresses, it is likely to encounter several hurdles. The SEC is currently embroiled in a legal dispute with Ripple, accusing the company of raising $1.3 billion through the unregistered sale of XRP. This ongoing lawsuit adds a layer of complexity to the approval process for a spot XRP ETF, as the SEC remains cautious in the crypto space.
While XRP faces these challenges, other cryptocurrency ETFs have made notable strides. In January, the SEC approved several spot Bitcoin ETFs from well-known firms such as BlackRock, Grayscale, and Fidelity. More recently, Ethereum ETFs have also received approval. Grayscale has announced plans to launch a “closed-end” XRP fund for accredited investors, providing yet another avenue for gaining exposure to XRP.
ETF vs. ETP: Regulatory Changes
One crucial distinction to understand is the difference between exchange-traded products (ETPs) and ETFs. The SEC often prefers the term ETP when discussing products like spot Bitcoin or XRP offerings. According to SEC official Natasha Vij Greiner, ETPs are not governed by the Investment Company Act of 1940, which means they lack certain protections that are afforded to traditional ETFs. These regulatory nuances could significantly influence the outcome of Bitwise’s filing and similar proposals in the future.
What’s Next for XRP?
As Bitwise awaits a decision, investors will be keenly observing the SEC’s response, particularly in light of the legal complexities surrounding XRP. While approval would mark a significant milestone for the token, regulatory uncertainty remains a significant factor that could either delay or entirely block the launch of a spot XRP ETF.
Conclusion
The filing of a spot XRP ETF by Bitwise has undoubtedly sparked considerable interest among investors. However, the path to approval is fraught with regulatory challenges, primarily due to the ongoing legal battle between the SEC and Ripple. As we await further developments, the crypto community will be closely monitoring the SEC’s next moves. Whether this filing will pave the way for the first-ever spot XRP ETF remains to be seen, but one thing is certain: the conversation around XRP and its future in the ETF market is far from over.
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