Bitwise Asset Management has taken an ambitious step by filing an initial registration statement with the Securities and Exchange Commission (SEC) to propose an XRP exchange-traded fund (ETF). As the cryptocurrency market continues to evolve, Bitwise’s initiative represents another attempt to cater to growing investor interest. With a strategic focus on major cryptocurrencies, Bitwise aims to offer diversified investment options by adding XRP to its existing range of ETFs.
Bitwise, with over $4.5 billion in managed assets, made its official filing on Wednesday, marking its entry into the race for a spot ETF that tracks XRP, currently the seventh-largest cryptocurrency. Previous attempts by other firms to introduce ETFs for cryptocurrencies like Solana faced regulatory challenges, indicating the SEC’s cautious approach to new crypto products. Despite these challenges, Bitwise’s filing reflects a continued interest in expanding ETF offerings beyond Bitcoin and Ethereum, which had seen approval earlier this year.
What are the Implications for Bitwise?
The filing signifies the start of a potentially lengthy approval process that does not guarantee success. While Bitwise did not pursue a Solana ETF, choosing XRP could offer a valuable opportunity to clients. According to Hunter Horsley, CEO of Bitwise,
“XRP is one of the most enduring, well-known assets in the space and is also recognized among mainstream investors.”
This strategic choice suggests Bitwise’s confidence in XRP’s value proposition, despite ongoing regulatory uncertainties surrounding XRP’s classification as a security.
How Does This Compare to Other Recent Developments?
Grayscale’s recent launch of an XRP trust indicates broader industry efforts to bring XRP-focused products to market. These efforts reflect the industry’s belief in XRP’s potential, even as the SEC’s regulatory stance remains uncertain. Coinciding with Bitwise’s move, a filing by Canary Capital for an XRP ETF highlights a growing interest among new crypto-focused investment firms.
The ongoing legal battles between Ripple and the SEC over XRP’s status add another layer of complexity. The SEC contends that XRP’s unregistered sales qualify as securities offerings, a claim that Ripple partially contested in court. As the SEC’s deadline to appeal a recent ruling approaches, the regulatory status of XRP remains a contentious issue that could impact future ETF approvals.
The introduction of Bitcoin ETFs earlier this year marked a significant milestone, drawing substantial inflows and fostering further interest in cryptocurrency investments. Bitwise’s XRP ETF proposal comes at a time when institutional interest in cryptocurrency is rising, despite potential regulatory hurdles.
Bitwise’s decision to pursue an XRP ETF underscores the evolving landscape of cryptocurrency investments. As the SEC evaluates the submission, investors and industry participants remain attentive to the potential implications for the broader market. As regulatory dialogues continue, the future of cryptocurrency-based ETFs will likely hinge on ongoing legal interpretations and SEC rulings.
