- WisdomTree has filed for the XRP ETF, joining a growing list of candidates.
- Regulatory difficulties might push altcoin ETF certification beyond late 2025.
On November 25, WisdomTree Funds sought a Delaware registration for an XRP exchange-traded fund. While the S-1 registration with the U.S. Securities and Exchange Commission is the next hurdle to clear, the effort is still an indication of intent by WisdomTree Funds to expand its crypto offerings.
The move puts WisdomTree in league with competitors such as Bitwise, Canary Capital, and 21Shares in the pursuit of an XRP ETF in the United States. WisdomTree has built experience in the crypto ETF space over the years, with strong expertise in running its European market spot Bitcoin ETF and Ethereum ETF.
Regulatory and Advocacy Approach of Ripple
Ripple Chief Executive Brad Garlinghouse advocated for creating altcoin ETFs, saying they will eventually be adopted. The filing aligns with predictions of increased activity from spot crypto ETFs, fueled by perceived pro-crypto momentum in Washington. However, major regulatory hurdles persist for altcoin-based ETFs.
Bloomberg analyst James Seyffart pointed to these problems, noting, for example, that there is no regulated XRP futures market as there is with Bitcoin and Ethereum. The SEC has always denied altcoin ETF proposals out of concern for manipulation and compliance.
Furthermore, Bitcoin and Ethereum benefit from fixed review periods in accordance with the 19b-4 rule, where WisdomTree’s S-1 lacks fixed deadlines and may extend to the last quarter of 2025 for approval.
The SEC Chair, Gary Gensler, is leaving in January 2025, which brings some uncertainty. A new chair might be clearer on crypto ETFs, but how much this might alter things is anyone’s guess.
According to Seyffart, multi-asset index ETFs such as Grayscale’s GDLC are less likely to have a regulatory issue since they’re Bitcoin and Ethereum-oriented. However, even the most Bitcoin-centric funds would be forced to have minimal allocations to altcoins if they hope to comply.
The introduction of an XRP ETF could broaden crypto investment opportunities, but it underscores the complexities of navigating U.S. regulatory frameworks.
