Crypto-focused asset manager Bitwise has officially registered an XRP exchange-traded fund (ETF) trust in the state of Delaware, signaling a potential new investment vehicle for the cryptocurrency. This registration, confirmed by a Bitwise spokesperson, represents an initial step toward what could eventually become a publicly traded XRP ETF, though significant regulatory hurdles remain.
The filing, listed on the Delaware Division of Corporations website, shows that the Bitwise XRP ETF Trust was incorporated on September 30, 2024, with CSC Delaware Trust Company serving as the registered agent. While this move marks a formal entry into the corporate registry, it does not guarantee immediate approval or listing.
Understanding the XRP ETF Registration Process
Registering a trust in Delaware is a standard procedure for many financial entities and fund managers. It is often one of the earliest administrative steps in creating a new investment product. However, this filing is separate from the rigorous and lengthy approval process required by the U.S. Securities and Exchange Commission (SEC).
An ETF cannot be offered to the public without SEC authorization, which involves detailed disclosures, regulatory reviews, and compliance with federal securities laws. This means that even with a state-level registration, the launch of a spot XRP ETF could still be months or even years away, depending on the regulatory landscape.
Market Context and Industry Expectations
The idea of an XRP ETF has been discussed within the crypto community for some time. Earlier this year, Ripple CEO Brad Garlinghouse described such a product as “inevitable,” especially in light of the successful launches of Bitcoin and Ether ETFs in the United States.
An approved XRP ETF would provide institutional and retail investors with a regulated and accessible way to gain exposure to XRP without directly holding the asset. This could significantly enhance market liquidity, strengthen investor confidence, and encourage broader adoption of the token.
Previous Rumors and False Alarms
This is not the first time an XRP ETF has made headlines. In late 2023, a fraudulent filing under BlackRock’s name falsely claimed the registration of an “iShares XRP Trust” in Delaware. The hoax triggered a 12% price surge in XRP before being denied by BlackRock. The incident remains under investigation by Delaware authorities.
The Bitwise filing, however, is legitimate and has been confirmed by the company. It reflects a growing interest among asset managers in expanding the suite of crypto-based exchange-traded products.
Regulatory Challenges: The SEC and Ripple Lawsuit
A major factor influencing the future of an XRP ETF is the ongoing regulatory relationship between the SEC and Ripple Labs, the company closely associated with XRP.
In December 2020, the SEC filed a lawsuit against Ripple, alleging that its sales of XRP constituted an unregistered securities offering. The case reached a pivotal moment in July 2023 when U.S. District Judge Analisa Torres ruled that XRP is not a security when sold on public cryptocurrency exchanges. This was viewed as a partial victory for Ripple, though the court also found that institutional sales of the token could be considered securities transactions.
This mixed ruling leaves questions about XRP’s overall regulatory status. The SEC’s stance on whether XRP is a security will be a critical determinant in the approval of any related ETF. 👉 Explore more on crypto investment vehicles
What an XRP ETF Would Mean for Investors
The introduction of an XRP ETF would represent a major milestone for the digital asset space. It would offer several key benefits:
- Regulated Access: Investors could gain exposure to XRP through a traditional brokerage account, simplifying the process and integrating crypto into conventional portfolios.
- Enhanced Security: Holding shares in an ETF eliminates the need for investors to manage private keys or use crypto exchanges, reducing the risk of theft or loss.
- Increased Liquidity: As a traded fund, it would likely attract significant volume from both retail and institutional players, improving market depth for XRP.
- Mainstream Validation: SEC approval would lend considerable legitimacy to XRP, potentially encouraging more widespread use and acceptance.
Frequently Asked Questions
What does Bitwise’s Delaware filing mean?
The filing means that Bitwise has legally registered a trust entity for a potential XRP ETF in the state of Delaware. This is an administrative first step and does not mean the ETF has been approved or will launch soon.
How long until an XRP ETF is available to trade?
It could take many months or longer. The Delaware registration must be followed by a formal application with the SEC, which involves a lengthy review process. There is no guaranteed timeline for approval.
Why is the SEC’s case against Ripple important for an ETF?
The SEC’s classification of XRP is crucial. If the SEC continues to view XRP as a security in certain contexts, it could create significant regulatory obstacles for the approval of a spot ETF, as securities laws impose stricter requirements.
How is this different from the fake BlackRock XRP ETF filing?
The BlackRock filing was a fraudulent submission that was quickly denied by the company. The Bitwise filing has been officially confirmed by the asset manager itself, making it a legitimate corporate action.
Who would benefit from an XRP ETF?
Institutional investors, financial advisors, and retail investors looking for a simple and secure way to add XRP exposure to their investment portfolios would be the primary beneficiaries.
What are the main hurdles for an XRP ETF approval?
The largest hurdles are regulatory clarity from the SEC regarding XRP’s status and the overall approval process for crypto-based ETFs, which has so far been limited to Bitcoin and Ether.