Asset management company 21Shares recently filed an application with the US Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF). The company submitted an S-1 form to register its Core XRP Trust shares for listing on the Cboe BZX Exchange, with Coinbase serving as the fund’s custodian. Earlier this year, 21Shares successfully launched spot Bitcoin and Ethereum ETFs after SEC approval, attracting significant investor interest.
The Core XRP Trust operates as a passive investment vehicle, aiming to track the price of XRP without attempting to generate additional returns through market timing. It will not use leverage, derivatives, or similar strategies for its assets, instead mirroring the performance of the CME CF Ripple-Dollar Reference Rate. The Trust offers indirect access to XRP’s market through a traditional brokerage account, reducing barriers and risks associated with directly holding or transferring XRP.
However, the chances of approval for an XRP ETF are slim due to the SEC’s ongoing legal battle with Ripple Labs, the company behind XRP. The SEC alleged that Ripple raised $1.3 billion through unregistered XRP sales, leading to uncertainty surrounding XRP’s regulatory status. Despite this, Ripple CEO Brad Garlinghouse remains optimistic about the eventual approval of an XRP ETF, citing recent approvals for Bitcoin and Ethereum ETFs by the SEC.
Other asset managers, including Canary Capital and Bitwise, are also pursuing approval for spot XRP ETFs, indicating strong institutional interest in expanding XRP investment options. While regulatory uncertainty remains a challenge, the growing interest in XRP ETFs signals a potential shift in the investment landscape for the digital asset. Investors will be closely following developments in the SEC’s decision-making process regarding XRP ETFs and the implications for the broader cryptocurrency market.
