Bitwise Files Official Application for XRP ETF, SEC Commissioner Weighs in on Chances for Approval

Bitwise, one of the largest asset managers behind several crypto exchange-traded funds (ETFs), has filed for the first spot XRP ETF with the US Securities and Exchange Commission (SEC). The trust will provide investors with exposure to XRP’s value and will reflect the coin’s value minus operational costs and liabilities, as mentioned in its application outline. 

This comes a day after Bitwise filed for XRP ETF Trust in Delaware on October 2, so the formal filing is a follow-through.

Related: Most Volatile US ETF: Leveraged MSTR Fund Reaches Top 1% of Funds, Takes in $40M in Single Trading Day

If you still think all of it is just rumours, well, here’s a tweet from Bitwise’s CEO, Hunter Horsley, talking about the filing:

Today we filed an S-1 for a Bitwise XRP ETP!

For more than a decade, XRP has been an enduring crypto asset that many investors want exposure to.

Over the past 6+ years we’ve worked to pioneer investment vehicles that provide access to the emerging opportunities in the space.…

— Hunter Horsley (@HHorsley) October 2, 2024

Is a Futures Market Needed?

Some market observers wonder if the trust would need a futures market first, the same way the SEC requested futures for Bitcoin ETFs. It doesn’t mean that a futures market is absolutely necessary for the approval of a spot ETF, but it surely makes a huge difference. 

In an interview with Tony Edward, host of the Thinking Crypto Podcast, SEC Commissioner Hester Peirce weighs in on the topic, stating that spot markets are possible without their futures counterparts, but it ultimately depends on the product.

With Bitwise filing for an #XRP ETF, a big question arises: will an XRP futures market be necessary? The SEC required it for Bitcoin and Ethereum Spot ETF approvals.

However, in my recent interview with SEC Commissioner Hester Peirce, she mentioned that a spot ETF doesn’t… pic.twitter.com/V5zhfT1xvM

— Tony Edward (Thinking Crypto Podcast) (@ThinkingCrypto1) October 2, 2024

The SEC’s previous hesitation arises because crypto is largely operating in an unregulated environment. The regulatory agency, as Peirce states, is able to better gauge risk in spot crypto ETFs by studying behaviour in the more controlled futures markets. These markets operate under far more strict rules that help protect investors and offer stability not always present in the crypto world (and spot ETFs in general).

Anyway, you would think XRP’s price is mooning right now, but no. It’s actually down -9.95% in the last 24 hours, possibly due to the recent SEC appeal. 

Related: Bitget Analyst Predicts XRP Rally in October, Says 30% a Possibility

Back to the filing, it states that shares in the ETF will be created and redeemed either in cash or, if regulatory approval is obtained, in-kind, but it would probably end up being in-cash rather than in-kind like the SEC demanded for Bitcoin and Ethereum ETFs.

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