Earlier in the year, Bitwise successfully listed Bitcoin and Ethereum Exchange Traded Funds (ETFs) on U.S. exchanges. Now the crypto asset manager is making a move for an XRP ETF.
Bitwise has filed an S-1 form to the U.S. Securities and Exchange Commission (SEC), a prerequisite for companies to issue a new security and gain listing on a public stock exchange. And on Tuesday, Bitwise registered an “XRP ETF” trust entity in the state of Delaware.
Exchange Traded Funds are popular financial instruments that trade on stock exchanges and give investors exposure to an underlying asset. The approval of the Bitcoin ETFs in January of this year sent waves through the industry and led to an all-time high in March of over $73K per bitcoin.
Spot Ethereum ETFs were also approved by the SEC in July 2024. However, they have been less popular than the Bitcoin ETFs. According to data from Blockworks, the Bitcoin ETFs have a total market cap of $72.98 billion, compared to Ethereum ETFs $5.59 billion, at the time of writing. It will be interesting to see if, or when, an XRP ETF is approved, what sort of volume it will draw in comparison to the two top cryptocurrencies.
However, it could be a long road to approval, as Ripple hasn’t always had the smoothest relationship with the SEC. In 2020, the SEC sued Ripple for $1.3 billion, claiming it sold unregistered securities to investors to raise money in the form of $XRP. But Ripple did get a partial win against the SEC last year when a judge ruled that programmatic XRP sales didn’t count as securities.
XRP, launched in 2012 by three developers who wanted to improve on the limitations of Bitcoin, is currently run by Ripple Labs Inc., an American technology company based in San Francisco. At the time of writing, XRP was the seventh-largest crypto by market cap, with around $33 billion. Its price was around $0.57 per token, as per data from CoinGecko.
XRP, Solana Could be Next for ETFs
There are currently two crypto ETFs available to trade on the U.S. stock market, Bitcoin and Ethereum. But many people in the space believe more ETFs are inevitable, and that XRP and Solana are next in line.
For now, Bitwise has taken the first steps towards acquiring regulatory approval for an XRP ETF. And back in June of this year, we saw the price of Solana jump from $135 per coin to $150 after the global asset manager VanEck filed for the first spot Solana ETF with the SEC.
While there’s a ways to go, ETF approval for XRP and Solana could bring a level of institutional investment to these top cryptocurrencies that has many holders excited, and the success of the Bitcoin ETFs explains why.
In May, a quarterly report filed by investment managers to the SEC revealed that over 600 firms had exposure to spot Bitcoin ETFs, with investments in the billions. Millennial Management, one of the world’s largest hedge funds, revealed it was holding nearly $2 billion across five spot Bitcoin ETFs, a number that could be much higher now.
Even banks and U.S. states had gotten in on the action. Wisconsin’s Investment Board disclosed a $161 million allocation split between BlackRock’s IBIT ($100 million) and Grayscale’s GBTC ($61 million). Wells Fargo and JP Morgan Chase also reported exposure to the ETFs.
While there’s optimism that XRP and Solana ETFs will eventually be approved, it’s unlikely to happen soon. The U.S. is holding presidential elections next month, and depending on the outcome, it could shake up the regulatory agency that’s had it out for crypto for much of the last four years. Some hope that people like Gary Gensler, the head of the SEC, will be replaced with more crypto-friendly faces. But we’ll have to wait to see.