Key takes
- Four key asset managers have submitted applications for Spot XRP ETFs to the SEC.
- The SEC decision may set precedents for future Crypto ETF applications.
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The race to launch a spot XRP ETF in the US has officially been turned on. On Thursday, the CBOE exchange filed four separate 19B-4 forms with the SEC, seeking approval for listings and trading rules changes for WisdomTree, Bitwise, 21shares and Canary.
The filing follows approval of Spot Bitcoin and Ethereum ETFs in early 2024. Each application has a great reference to the July 2023 Sec-Ripple Labs ruling that XRP itself was not security, but the court has determined that Ripple's institutional sales violated the securities law. .
Unlike Bitcoin and Ethereum, XRP does not have a CME futures market. This has historically been an important requirement for ETF approval. The application argues that alternative measures, including on-chain analysis, price monitoring and market structure analysis, provide adequate protection against fraud and operations.
Each fund manager will present a clear discussion of XRP's market stability. Wisdomtree highlights global liquidity and arbitrage opportunities, while Bitwise draws comparisons between Bitcoin and Ethereum, demonstrating robust price discovery. 21Shares focuses on XRP pricing mechanisms and consistency of transaction volumes, while Canary highlights the asset use cases in payments and remittances.
The application states that ETFS will raise XRP from exchange and trading platforms, not from Ripple Labs, where the SEC previously identified a violation of securities laws.
19B-4 filing is a regulatory requirement for the new ETF list. The SEC is 45 days from the publication of the Federal Register to confirm the filing and make a decision. Regulators may approve, disapprove, or initiate procedures to determine whether to disapprove a change to a rule. This review period may be extended to 90 days if the SEC provides inference or if the CBOE agrees to it.
Recently, Grayscale was applied to convert the XRP Trust into the NYSE ARCA Exchange Business Fund, providing broader access to XRP through institutional monitoring.
This is a developing story.
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