An asset manager, Bitwise, submitted a filing to the Division of Corporations in Delaware for an XRP exchange-traded fund (ETF). The registration for establishing a Delaware statutory trust, a business-oriented trust legally recognized in the state, is included in this filing.
Bitwise, BlackRock, and Fidelity were among the first companies to register trust entities for Ethereum (ETH) and Bitcoin (BTC). This action was taken before the application filing to list and trade ETF shares based on these cryptocurrencies.
Similarly, the initial step in the process of petitioning for an ETF listing and trading is the registration of a trust entity.
The Ripple Settlement provides a clear path for the potential launch of an XRP ETF
Grayscale disclosed its intention to introduce an XRP Trust investment product last month, with the potential to convert it into an XRP ETF in the future.
Grayscale was compelled to terminate its previous trust in 2021 due to the Securities and Exchange Commission’s litigation against Ripple Labs, and the SEC accused Ripple of selling XRP as an unregistered security.
Nevertheless, the legal dispute was resolved earlier this year when Ripple reached a settlement with the SEC for $200 million.
The resolution of XRP’s regulatory status has facilitated the relisting of XRP on US exchanges. It has enabled companies such as Grayscale to create new investment products related to XRP.
However, the regulatory environment for cryptocurrencies remains unpredictable.
For an XRP ETF to become a reality, it must adhere to SEC regulations, which have demonstrated a cautious stance toward crypto ETFs, particularly in light of the previous disputes regarding XRP’s classification as a security with Ripple.
XRP experienced a 2.7% decline to $0.60 on Wednesday, indicative of a broader decline in the cryptocurrency market that was influenced by the intensification of tensions between Israel and Iran.
Ripple’s CEO champions the potential of the XRP ETF
Brad Garlinghouse, the CEO of Ripple, expressed his endorsement of an XRP ETF in February. He proposed that investors would value this financial instrument for its diversification.
In a Bloomberg interview, he stated, “I believe it is only logical.” “Additional exchange-traded funds (ETFs) will be introduced.” It is comparable to the initial stages of the stock market.
Exposure to a single stock or company is not desirable. Typically, it is advisable to consider the diversification of risk. “Consequently, I anticipate we will observe additional exchange-traded funds (ETFs).”