The US SEC has officially confirmed the XRP ETF application from Grayscale Investments
The United States Securities and Exchange Commission (SEC) has finally acknowledged an XRP-linked ETF filing. According to Nate Geraci, the President of the ETF Store, this is the application submitted by the popular asset management firm Grayscale Investments. The asset manager filed to convert the Grayscale Digital Large Cap Fund (GDLC) into an ETF.
Will the SEC Approve XRP ETF Products?
The GDLC is a multi-asset fund that provides investors with exposure to various cryptocurrencies, including Ripple-associated XRP, Bitcoin (BTC), Ethereum (ETH), Avalanche (AVAX), and Solana (SOL). BTC has the most significant percentage (77%) of the fund’s Assets Under Management (AUM).
Following the SEC’s formal acknowledgment of this XRP ETF filing, the Commission requests the public’s comment. The latest development does not mean that the SEC will share its decision on the offering very soon. Crypto and ETF experts continue to speculate on the likelihood that an XRP ETF will receive a green light from the regulator soon.
Ripple CEO Brad Garlinghouse believes that an XRP ETF is “inevitable,” particularly after the approval of Bitcoin and Ethereum ETFs in the U.S. This suggests that he is very optimistic about the blockchain payment firm’s victory over the regulator in the ongoing legal debacle.
Senior Bloomberg ETF Analyst Eric Balchunas opines that combining crypto ETF with some illiquid assets could potentially win the approval of the SEC. Therefore, Grayscale may have an edge over other asset managers, including Bitwise and Canary Capital, both of which had earlier filed their respective XRP ETF applications.
If approved, the large-cap ETF may face a similar boom as its Bitcoin counterpart, which is currently making waves in the market. Bitcoin ETFs continue to record huge inflows, with BlackRock leading the issuers. However, it took about ten years for the SEC to approve the product. Hence, prospective XRP ETF issuers may have to exercise much patience to get the Commission on their side.
Can Bitwise and Canary Capital Filing Make the Difference?
A few days into October, Bitwise Asset Management submitted its application for the XRP ETF on the State of Division of Corporations website. Bitwise officially confirmed that its application is legitimate to avoid the issue surrounding an earlier BlakRock-linked XRP ETF that appeared last November 2023.
Canary Capital’s application for the same product, which seeks to offer institutional investors a regulated option for crypto investments, followed a week later. Based on its filing, the Canary XRP ETF would track the coin’s price by using the Chicago Mercantile Exchange (CME) CF Ripple index and avoid derivatives products for tracking.
A firm spokesperson noted, “We’re seeing encouraging signs of a more progressive regulatory environment coupled with growing demand from investors for sophisticated access to cryptocurrencies beyond Bitcoin and Ethereum—specifically investors seeking access to enterprise-grade blockchain solutions and their native tokens such as XRP.”
The SEC has yet to officially acknowledge any of these two first XRP ETFs as of this writing.
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