Wall Street’s Crypto-ETF Boom Gathers Pace on First XRP Filing
10/03/2024 00:20
(Bloomberg) -- Wall Street’s ETF disruptors are once again pushing regulators to open up the crypto boom to the masses after Bitwise Asset Management Inc. became the first to file for a fund that invests directly in XRP, the world’s seventh-largest digital token.Most Read from BloombergA 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High RentsGang Violence Is Moving to the Amazon’s Fast-Growing CitiesA Housing Crisis Brews in Rwanda’s Capital CityNew Rowhouses in London That Offer a Br
(Bloomberg) -- Wall Street’s ETF disruptors are once again pushing regulators to open up the crypto boom to the masses after Bitwise Asset Management Inc. became the first to file for a fund that invests directly in XRP, the world’s seventh-largest digital token.
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The asset manager submitted paperwork with the Securities and Exchange Commission on Wednesday to launch the Bitwise XRP ETF. The filing doesn’t yet include a ticker nor a fee.
The move comes after the launch of ETFs that hold Bitcoin and Ether earlier this year. Since then, the cohort of Bitcoin funds have amassed more than $18 billion in net inflows, while the Ether group has around $570 million in outflows.
Both the $2.4 billion Bitwise Bitcoin ETF (ticker BITB) and the $250 million Bitwise Ethereum ETF (ETHW) sit in the middle of the roster when it comes to assets.
The Bitwise XRP ETF bid also comes after a federal judge in August ordered Ripple Labs Inc. to pay a civil penalty for selling its XRP token to institutional investors without registering it with US regulators after years of dispute.
“There’s regulatory clarity following the conclusion of the cases with the SEC,” said Stephane Ouellette, co-founder and chief executive officer of FRNT Financial. “I don’t expect that in a status quo market environment the launch would be anything remotely like the BTC ETFs.”
XRP’s price tumbled over 8% as of 12:03 p.m. in New York.
With the US presidential election about a month away, cryptocurrencies have emerged as a point of contention between the Republican and Democratic parties. Donald Trump, in particular, has made crypto a significant talking point of his campaign. But industry executives have long bristled at an asset class they perceive as burdened with overzealous regulation under President Joe Biden’s administration.
“We could see other issuers follow suit with more applications,” said Noelle Acheson, author of the Crypto Is Macro Now newsletter. “They will all be following the same playbook, though. The probability of approval under a Democratic administration will be almost zero. But if the Republicans win, then it’s certainly a lot more likely.”
Earlier this year, VanEck Asset Management and 21Shares AG both filed for Solana ETFs, which Bloomberg Intelligence’s James Seyffart described as “dead on arrival.” A change of leadership in the SEC may be needed, he added.
In September, crypto asset manager Grayscale Investments said it has begun to offer the Grayscale XRP Trust, aimed at providing investors the opportunity to gain exposure to the token that powers the XRP Ledger, a distributed, peer-to-peer network created to facilitate cross-border financial transactions.
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