Amid growing regulatory optimism, Canary Capital joins Bitwise in applying to join the XRP ETF. ETFs aim to give investors easy access to XRP without the risk of direct ownership. Despite these developments, the price of XRP remains stagnant, reflecting broader market challenges.
Recently, Canary Capital applied to the U.S. Securities and Exchange Commission to launch a Spot XRP Exchange Traded Fund (ETF). The development follows a similar filing by Bitwise last week. This coincides with a new trend where several companies are flooding the market in an attempt to offer investors new ways to get exposure to digital assets.
Canary Capital founder Stephen McClurg said he was optimistic about the changing regulatory environment. He added that investors are increasingly seeking exposure to a much wider range of cryptocurrencies than just Bitcoin and Ethereum. “There are encouraging signs that the regulatory environment is becoming more progressive,” he said.
The ETF will allow investors to trade the digital asset XRP without actually purchasing and holding the cryptocurrency directly through a regular brokerage account, and without all the associated hassles and risks. In its Oct. 8 filing, the ETF said it would track the price of XRP using the CF Ripple Index provided by the Chicago Mercantile Exchange. In particular, avoid the use of derivatives, which may pose additional risks.
XRP price struggles amid ETF hype and market concerns
Despite the hype over the new ETF filing, XRP’s market performance tells a different story. The cryptocurrency was trading at $0.5293, up slightly over the past 24 hours, but down 11% this week. The mixed reactions of investors have once again raised pressing concerns in the crypto market.
Source: CoinMarketcap
According to a recent report by Kaiko, market sentiment appears to remain skeptical as XRP price movements largely follow broader trends affecting the cryptocurrency ecosystem.
Bitwise and Grayscale are both expanding their digital asset offerings, but the path to SEC approval for spot ETFs is fraught with challenges. According to industry watchers, the main factor standing in the way of the SEC is the very possibility of market manipulation. Approved ETFs underperform because large offshore trades take place on unregulated exchanges.
Grayscale’s position and future prospects
Grayscale recently reactivated its XRP trust, indicating that it intends to navigate the complexities of the current regulatory environment. However, it is unlikely for asset managers to convert this particular trust into a spot XRP ETF, at least for now.
Grayscale’s history of engagement with the SEC, especially after successful litigation regarding the future of BTC, provides a roadmap for other efforts. However, there is no regulated futures market for Ripple’s native token, making the path to ETF approval extremely complicated.
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