Asset manager Bitwise could launch an XRP ETF after it filed for an exchange-traded fund (ETF) with Delaware’s Division of Corporations. The September 30, 2024 filing shows the company has already created a Delaware statutory trust, a surefire first step towards creating an ETF with the US Securities and Exchange Commission (SEC).
The filing, which is contained on the official website of the state’s Division of Corporations, is usually the launching pad for companies planning to list and trade shares of an ETF. All the companies, including Fidelity and Blackrock, that have previously registered exchange-traded funds, first filed trusts for Bitcoin (BTC) and Ether (ETH) before filing exchange-traded funds for their cryptocurrencies.
Confirmation of Authenticity
There have been rumours surrounding the introduction of a Bitwise XRP exchange-traded fund circulated previously, most of which were hoaxes. Most of the previous illegitimate filings uploaded to the website were seen as attempts by those involved to pump the price of the XRP token. For example, someone filed what was meant to be a Blackrock XRP ETF, only for the asset manager to flag it as a hoax. A Bitwise spokesperson has confirmed the authenticity of the latest filing. The spokesperson stated: “We can now confirm that this is legitimate and from Bitwise.”
The developments surrounding the XRP ETF by Bitwise come towards the tail end of a four-year legal battle between Ripple Labs, the XRP issuer, and the SEC. The courts imposed a $125 million fine on Ripple Labs following a partial win by the SEC in a motion involving remedies. The decision by Judge Analisa Torres for a $125 million settlement was a slap on the wrist of Ripple Labs, considering that the financial watchdog had sought a $2 billion penalty. In the sentence, the judge opined that the institutional sales of XRP may have violated security laws; its sale on public exchanges never met the threshold of securities transactions.
Fear of Potential Delay
There’s fear within the crypto community that the realization of an XRP ETF could be delayed if the SEC decides to appeal the decision by Judge Torres before the end of the week. Commenting on the possibility of such a development, Ripple Labs CEO Brad Garlinghouse had previously expressed optimism that an XRP exchange-traded fund could come early next year. Brad stated: “XRP ETF is just simply inevitable. I think we’re going to see it in 2025.”
Also, considering the experience of the way the SEC has dealt with other asset management companies that sought licensing for their ETF projects, the regulator could pour cold water on the optimism surrounding the announcement. Even in the case that the SEC doesn’t appeal the ruling by Judge Torres, the crypto community can only hope that the SEC doesn’t play delaying tactics as it did with the BTC and ETH ETFs for years before finally approving them in early 2024.
Potential Boost to XRP’s Liquidity and Adoption
Plans to introduce a Bitwise XRP ETF come on the heels of successful launches of BTC ETFs by Fidelity and Blackrock in early 2024. The SEC approvals became a turning point within the cryptocurrency regulatory framework surrounding crypto investment products. Should everything go according to plan and the regulator grants the requisite licensing, this would lead to greater XRP institutional adoption besides facilitating the integration of cryptocurrencies into traditional finance. Nonetheless, there’ll likely be a lengthy waiting period since regulatory approvals are neither fast nor assured.
The filing for an XRP trust to facilitate the creation of a Bitwise XRP exchange-traded fund is a positive development in the dynamic journey of digital assets. There’s every possibility that the development will lead to the introduction of a new investment vehicle that will lead to XRP institutional adoption, subject to regulatory approval from investors. Should the application be approved, it will introduce institutional investors and potentially boost the token’s liquidity and adoption.
