Spot crypto ETFs are gaining momentum, and many expect the upcoming US election to influence their approval.
The Securities and Exchange Commission’s recent appeal of the court’s ruling in the case against Ripple Labs could also prevent these types of funds from getting a regulatory green light.
Investment firm Bitwise filed on Tuesday for an ETF that directly holds Ripple (XRP). Canary Capital appears to have applied for a similar product, according to the Delaware corporation’s website.
Read more: Bitwise files SEC filings to launch Spot XRP ETF
XRP, the digital asset that powers the XRP Ledger public blockchain, helps facilitate cross-border payments and remittances, Bitwise said in a press release on Tuesday. XRP’s market capitalization is around $33 billion, which means it ranks 7th among crypto tokens.
“Bitwise, which is well known for its crypto expertise, is likely to launch this product in the future,” said Neena Mishra, director of ETF research at Zacks Investment Research. “Politics will decide whether this happens immediately or in a few years.”
Mishra claimed that Bitwise is preparing its products in case Donald Trump is elected president. Republican candidates said in July that if elected, they would fire SEC Chairman Gary Gensler.
“If Harris wins and Gensler remains SEC Chairman, there is no chance that the application will be approved despite recent comments regarding support for digital assets,” Mishra told Blockworks. spoke.
Mishra’s thoughts are similar to those expressed by VanEck’s Matthew Siegel after he filed for the Solana ETF in June. He noted that the filing was essentially a bet that Trump would win in November.
Sigel declined to comment on the latest Bitwise S-1, saying only, “We much prefer SOL to XRP.”
SEC appeals as a potential hurdle
Bitwise’s filing comes just before the SEC decides to appeal Judge Annalisa Torres’ decision in the case against Ripple Labs.
Read more: SEC appeals Ripple over “inconsistency” with Supreme Court precedent
Torres ruled last year that Ripple’s institutional sales of XRP count as offerings of unregistered securities, but programmatic sales do not. And in August, a court ordered Ripple to pay a $125 million penalty, far less than the $2 billion sought by the SEC.
We know the deadline for the SEC to approve or deny the Bitwise .
In any case, industry watchers have suggested that the authorities’ actions could delay clarity on XRP’s status and impact planned ETFs that hold the asset.
Alex Thorne, head of research at Galaxy Digital, said in a post on X on Tuesday that if the SEC chooses to appeal, the chances of Bitwise’s XRP ETF being “successful” drop to “nearly zero.”
Bitwise’s planned XRP ETF is the latest US fund plan to directly hold crypto assets.
Spot Bitcoin and Ether ETFs appeared on US exchanges in January and July, respectively. VanEck and 21Shares also announced plans to launch a Spot Solana fund.
Some industry observers previously told Blockworks that it may be difficult for the SEC to approve spot crypto ETFs outside of BTC and ETH, given precedent where regulators wanted to consider regulated futures markets first. He said he could not. Not present in XRP or solana.
But the plans laid out by Bitwise and Canary appear to advance a growing recognition that the tides of cryptocurrency regulation in the United States are changing.
Bitwise declined to comment, but a Canary Capital spokesperson said: “There are signs that the regulatory environment is becoming more flexible.”
The representative continued, “This year’s Spot Ethereum ETF approval follows the previous Spot Bitcoin ETF approval, which is positive, especially considering how long it took for the ETH futures product to be approved. “It shows great momentum,” he added. We are optimistic about the next stage of development in this field. ”
A revised version of this article was first published in yesterday’s Forward Guidance Newsletter. Subscribe here so you don’t miss tomorrow’s issue.
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