Emily Walker
WisdomTree, a global issuer of exchange-traded funds (ETFs) and asset manager, has officially submitted its S-1 application seeking regulatory approval for a spot XRP ETF to the U.S. Securities and Exchange Commission (SEC). This makes it the fourth asset manager in the U.S. to pursue such an ETF.
Increased Demand for XRP ETF
The planned fund, referred to as the WisdomTree XRP Fund, is designed to allow investors to benefit from XRP’s price fluctuations through shares available on the Cboe BZX Exchange. The fund intends to adopt a cash-create approach for initializing and redeeming shares, with a potential transition to an in-kind model if approved.
Coinbase Global affiliates will act as the main execution agent and custodian for XRP, having previously worked with WisdomTree on its Bitcoin ETF, which launched earlier this year. In its application, WisdomTree highlighted Coinbase’s crucial role in the U.S. spot XRP ETF landscape, stating:
Coinbase acts as the custodian and primary execution agent for multiple competing XRP exchange-traded products, making it essential in the ecosystem for U.S. spot XRP ETFs.
Other companies, including Bitwise, Canary Capital, and 21Shares, have also made filings for spot XRP ETFs. Bitwise initiated the filings back in October, followed by Canary Capital on October 9, and 21Shares with its Core XRP Trust on November 1.
XRP Approaching Record Highs
This ETF filing coincides with a remarkable rise in XRP’s price, which has surged by 41% within a day and has seen an impressive 430% increase over the last month, bringing its market cap to roughly $153 billion.
Currently priced at $2.71, XRP has also registered a significant 321% jump in trading volume, showcasing strong interest from investors. The token is now only 23% away from its all-time peak of $3.40, hit during the 2018 cryptocurrency surge.
The recent price growth has been partially linked to political shifts, especially following President-elect Donald Trump’s election, who has committed to making impactful changes to cryptocurrency regulations. Trump’s plans have gained traction with the announcement of SEC Chair Gary Gensler’s resignation, effective on Trump’s inauguration day, January 20.
The SEC has been a major point of contention for XRP in recent years, stemming from a lawsuit alleging that Ripple Labs, the entity behind XRP, violated securities laws by classifying its tokens as unregistered securities.
However, with changes in leadership at both the SEC and the Commodity Futures Trading Commission (CFTC), there is a growing optimism about the possible resolution of Ripple’s prolonged legal issues with the SEC.
Image courtesy of DALL-E, with chart data from TradingView.com.