The Chicago Board Options Exchange (Cboe) has filed applications for multiple spot XRP exchange-traded funds (ETFs), marking a significant development in the cryptocurrency investment landscape. The filings, submitted on behalf of asset managers including Bitwise, WisdomTree, 21Shares, and Invesco Galaxy, signal growing interest in expanding crypto investment options beyond Bitcoin and Ethereum.
XRP, the digital asset associated with Ripple, has long been a subject of regulatory scrutiny, particularly due to its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). Despite this, the latest ETF applications highlight increasing confidence in XRP’s potential as a tradable asset on major exchanges.
Speaking on the development, Bloomberg ETF analyst James Seyffart noted, “This is just a first step. We’ll need to see 19b-4 and S-1 filings before the SEC officially acknowledges them and sets a decision timeline.” His comments suggest that while the filings are a notable milestone, the approval process could take time.
The move to introduce XRP spot ETFs follows the broader trend of crypto ETFs gaining traction in traditional finance. The approval of Bitcoin spot ETFs in early 2024 opened the door for asset managers to explore similar products for other major cryptocurrencies. Ethereum spot ETFs have also been filed and are awaiting SEC decisions, setting a precedent for potential approval of other digital asset ETFs.
However, the regulatory landscape remains a key factor in the success of these filings. XRP’s legal history with the SEC has created uncertainty in the past, as the regulator has argued that XRP constitutes an unregistered security. The ongoing legal battle between Ripple and the SEC has seen partial victories for both sides, with a 2023 ruling stating that XRP is not a security when sold to retail investors but may be considered one in institutional sales.
Despite the regulatory challenges, ETF issuers remain optimistic about XRP’s viability in the market. If approved, spot XRP ETFs would provide investors with direct exposure to the asset without requiring them to hold or manage digital wallets. This could attract institutional investors and potentially boost liquidity for XRP.
Market experts believe that the SEC’s decision on Ethereum ETFs could influence the fate of XRP-based ETFs. If the commission approves Ethereum spot ETFs, it may set a precedent for XRP’s approval. However, if the SEC continues to resist broader crypto ETF offerings, issuers may face significant hurdles.
At present, the filings are in the early stages, and the SEC will need to review them before making any official decisions. The approval process for Bitcoin spot ETFs took several years, and analysts suggest that XRP ETFs could face a similarly lengthy evaluation.
For now, the crypto industry is watching closely to see how regulators respond to this latest development. If approved, XRP spot ETFs could mark another major step toward mainstream adoption of digital assets within traditional financial markets.
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