- WisdomTree files for an XRP ETF as XRP skyrockets 360% in one month.
- Changes in US political dynamics may favor ETF approval.\
To further boost business development through this offering, the SEC said asset management firm WisdomTree filed a Form S-1 registration statement overseeing $113 billion in assets that proposes the WisdomTree XRP Fund. If approved by regulators, an ETF exchange-traded fund would essentially mirror XRP, the third-most-large market-capitalized cryptocurrency.
In the December 2 filing, Bank of New York Mellon has been named as the trust administrator for the fund. However, WisdomTree has not made known the ticker symbol of the fund. The move makes it one among a long list of asset managers seeking to roll out XRP-based ETFs in the United States, along with Bitwise, 21Shares, and Canary Capital.
Regulatory Obstacles to XRP ETFs
A legal battle between Ripple Labs, the issuer of XRP and SEC hangs over its ETF. Recently, the SEC has filed an appeal to challenge a court’s decision that eventually held XRP’s secondary market sales to retail investors are not considered securities transactions. Ripple Labs followed with a cross-appeal, extending the current litigation.
Ripple’s XRP has taken it relentlessly since early November: prices began trading in the $0.50, touching their seven-year high as far up as $2.45 within a month and achieving that 360% hike in that period. XRP, whose market capitalization at present reads as a significant number of $134 billion has toppled Tether at market capitalization by assuming the third spot position after the dollar and Bitcoin.
Despite these headwinds, market optimism is building around the potential leadership changes at the SEC. This, coupled with the reports about the resignation of Gary Gensler, might fuel further hopes in regard to a better regulatory standing of crypto that will facilitate the way to XRP ETFs.
WisdomTree Physical XRP (XRPW) – An Exchange-Traded Product recently rolled out on the most prominent European exchanges, which includes Deutsche Börse Xetra, Swiss Exchange, and Euronext.
Alex Thorn, Head of Research at Galaxy Digital, said on an investor call that the regulatory uncertainty of the Ripple case with the SEC may delay the approval of XRP ETFs. Still, as more asset managers like WisdomTree enter the fray, the demand for crypto-based investment products remains clear.
With the changing landscape of regulation and Ripple’s ongoing litigation, it is still uncertain what the approval process for XRP ETFs will be in the U.S. In any case, experts believe changes in leadership at the SEC can make room for these funds and new opportunities for investors in this burgeoning digital asset space.
