Competition for XRP exchange-traded funds (ETFs) has intensified after crypto investment firm Canary Capital filed with the U.S. Securities and Exchange Commission (SEC).
The move comes after Bitwise filed an S-1 registration form last week to list its XRP ETF. Canary Capital observed positive signs of a favorable regulatory environment driving investor demand.
Canary Capital files for Spot XRP ETF
Cryptocurrency investment firm Canary Capital has filed a spot XRP ETF with the U.S. Securities and Exchange Commission (SEC).
This new development makes Canary the second potential issuer looking to offer XRP ETFs to customers. The filing comes after Bitwise filed an S-1 filing with the SEC for its XRP exchange-traded fund on October 2.
In a filing, Canary Capital indicated that its ETF will provide customers with access to Ripple’s native token market via traditional brokerage accounts. The company also noted that the product eliminates the risks and limitations associated with purchasing and holding tokens directly.
Additionally, the investment firm revealed that its exchange-traded fund will track the price of XRP using the Chicago Mercantile Exchange’s (CME) CF Ripple Index, a real-time price benchmark product.
Again, Canary Capital plans to keep the ETF independent of other derivative products while tracking the value of XRP. The company noted that these moves could expose its ETFs to additional counterparty and credit risk.
The filing states in part: “This trust allows certain investors to invest in strategic and tactical assets leveraging XRP by investing in stocks rather than directly buying, holding, or trading XRP. You will be able to execute your allocation strategy more effectively and efficiently.”
Meanwhile, Canary Capital has not yet indicated a ticker for the exchange-traded fund or its potential custodian.
Canary Capital founder Steven McClurg reacted to this new development. He noted that the company moved to the XRP ETF after observing positive signs that the regulatory environment for cryptocurrencies was progressing.
The founders pointed to investors’ growing interest in advanced access to crypto assets as the inspiration behind this move. He also said that more people are looking for alternatives like Ripple’s native tokens, and that demand has outstripped Bitcoin and Ethereum-related products.
Will this product be available in the US?
The spot XRP ETF race has sparked some reactions within the cryptocurrency industry.
Some believe a spot XRP ETF will never emerge due to the legal battle between the SEC and Ripple. Although a judge declared this non-security and fined Ripple $125 million in civil penalties, the SEC is still challenging the decision.
Securities regulators appealed the decision to the U.S. Court of Appeals for the Second Circuit in Manhattan.
However, despite the pessimism, some big names in the crypto world believe the XRP ETF will be approved. Nate Geraci, president of ETF Store, argued that ETF approval is now a matter of when it will be approved.
Also apply for XRP ETF…
IMO, approval is not a question of if, but when.
However, unless there is a change of government, that “when” will be a long time in the future. https://t.co/jMW4NUjhBH
— Nate Geraci (@NateGeraci) October 8, 2024
But he believes the approval will last until there is a change of government.
