Bitwise Asset Management has filed an application for a U.S.-based exchange-traded fund based on the price of XRP, the world's seventh largest cryptocurrency by market value.

The Bitwise XRP ETP will directly hold XRP, according to Bitwise's S-1 registration statement to the Securities and Exchange Commission on Wednesday.

Bitwise's proposal follows less than two weeks after Grayscale Investments added an XRP trust to its cryptocurrency investment products, sparking speculation that Grayscale may issue its own XRP ETF.

XRP is the token of the XRP Ledger, a blockchain network designed to make cross-border payments faster and more efficient.

XRP was recently trading at about 58 cents, down more than 4% over the past 24 hours, according to data provider CoinMarketCap.

This year, issuers' have ramped up their efforts to meet surging demand for crypto-focused investments, particularly those based on the ongoing price of major digital assets. Bitwise has already introduced ETFs based on the spot price of bitcoin and ether, the two largest cryptocurrencies by market capitalization. Ether is the token of the Ethereum blockchain.

The SEC must approve Bitwise S-1 filing and a subsequent 19-b4 submission, a formal request for a rule change showing the issuer has addressed agency concerns before the fund can begin trading.

Spot Bitcoin ETFs Soar

The Bitwise Bitcoin ETF (BITB) has generated more than $2.1 billion in net inflows, the fourth most among 11 funds that debuted in January after winning approval from the SEC. Those widely successful ETFs have generated nearly $19 billion in inflows, according to data from U.K. asset manager Farside Investors.

The bitcoin fund approvals seemed to create a more favorable regulatory environment. In July the agency approved nine ether-based funds, including the Bitwise Ethereum ETF (ETHW). ETHW has generated roughly $326 million in inflows, the third most among the fledgling products, although the funds have received a more tepid investor welcoming with net outflows.

During the summer, 21Shares and VanEck filed applications with the SEC for ETFs based on the spot price of solana, the token of the Solana blockchain and fifth largest crypto by market capitalization. Last month, the SEC greenlit options trading for BlackRock's iShares Bitcoin Trust (IBIT), another sign of a more receptive regulatory environment. An option is a financial instrument that gives its owner an option to buy or sell an underlying asset.

In a statement, Bitwise CEO Hunter Horsley touted the potential of blockchain technology to transform monetary systems.

"It's why for the past seven years we've helped investors access the opportunities in the space, and we're excited to continue that work with our filing," he said.

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