XRP Spot ETF: Bitwise Leads the Way Amid SEC Battle & Growth
Introduction to XRP and Ripple
XRP is the native cryptocurrency of the Ripple platform, launched in 2012 to simplify and speed up international money transfers.
That is, XRP is intended to be used by financial institutions as a means of exchange between different currencies through the RippleNet system.
A total of 100 billion tokens have been issued, of which 65% are under the control of Ripple Labs. For more than a decade, the XRP token has been a stable crypto asset that many investors want to gain access to.
Bitwise’s Application for XRP ETF
In early October, digital asset manager Bitwise filed an application to launch a spot exchange-traded fund (ETF) based on XRP.
In this case, BNY will act as the trust administrator, and Coinbase Custody Trust Company will be the custodian of the spot XRP ETF.
If the US Securities and Exchange Commission (SEC) approves the creation of an exchange-traded fund, this will provide investors with easy access to the XRP token.
Recall that this year, a number of cryptocurrency exchange-traded funds (ETFs) have already begun trading on the market after their approval by the SEC.
In January of this year, the SEC approved several spot Bitcoin ETFs, including from firms such as BlackRock, Grayscale, and Fidelity.
In anticipation of this event, the Bitcoin rate rose significantly in price. Later, the agency approved the creation of eight Ethereum ETFs.
Bitwise XRP Trust: Investment Objective
Bitwise’s registration statement says that the investment objective of the trust is to provide exposure to the value of XRP held in the trust, less the trust’s operating expenses and other liabilities.
The registration statement says: “XRP is a decentralized digital asset and its ownership is reflected in a decentralized ledger.
Historical Context: Grayscale’s XRP Fund
It is worth recalling that Grayscale previously launched an XRP fund and then closed it in 2021 after the SEC declared the token a security.
Since December 2020, the SEC has been battling Ripple over the status of XRP. The SEC was embroiled in a legal battle with Ripple after the agency accused the company of raising $1.3 billion by selling XRP, which it considered an unregistered security.
Partial Victory for Ripple in July 2023
In July 2023, Bitwise won a partial victory. The court ruled that programmatic sales and other distributions of the token did not constitute the offer and sale of investment contracts.
The SEC then attempted to challenge the ruling, but the court rejected the Commission’s interlocutory appeal. The agency still has the opportunity to try again.
But market participants believe that this will not change anything about the status of XRP.
Canary Capital’s XRP ETF Application
It became known that crypto investment company Canary Capital also filed an application to create an XRP spot ETF with the SEC after Bitwise filed an S-1 registration statement a week earlier.
A custodian or administrator has not yet been appointed.
XRP Price Analysis: 2023-2024 Trends
As we can see, the XRP price chart in 2023-2024 cannot boast of short-term stability (the coin quotes fly by 40% per month), but the medium-term trend is upward. The nearest support level is at $0.48.
