Bitwise Files for XRP ETF

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• Bitwise Asset Management has filed for the first exchange-traded fund (ETF) based on XRP with the SEC
• The fund aims to offer direct exposure to XRP, the seventh-largest cryptocurrency by market cap, through a spot ETF
• This filing arrived just hours before the SEC filed an appeal against a ruling on Ripple’s $125 million penalty

Asset management company Bitwise yesterday submitted an application with the U.S. Securities and Exchange Commission (SEC)to launch an XRP exchange-traded fund (ETF), which, if approved, would be the first ETF to track the performance of Ripple’s XRP token. This marks another step in Bitwise’s efforts to broaden crypto investment options after its recent Bitcoin and Ethereum ETF launches and makes XRP the third alt coin to receive an ETF application. The filing puts the SEC in an interesting position, given that it is going through the courts to prove that XRP is a security.

“Many Investors Want Exposure”

Bitwise CEO Hunter Horsley revealed the filing on X, calling it an “enduring crypto asset” with pent-up demand:

Today we filed an S-1 for a Bitwise XRP ETP!

For more than a decade, XRP has been an enduring crypto asset that many investors want exposure to.

Over the past 6+ years we’ve worked to pioneer investment vehicles that provide access to the emerging opportunities in the space.…

— Hunter Horsley (@HHorsley) October 2, 2024

XRP has been on the crypto scene since mid-2013, showing an endurance that many more illustrious coins would have wished for. Since 2020, however, it has been at the center of a legal battle between the SEC and Ripple Labs since December 2020, with the regulator accusing the company of conducting unregistered securities sales through its token.

SEC in Interesting Position

In 2023, Judge Annalisa Torres ruled that XRP tokens sold to individuals did not constitute a sale of securities, which the SEC has appealed, but that those sold to institutional investors might. The SEC demanded that Ripple be fined $2 billion for this infraction, but Judge Torres awarded it only $125 million. However, the day that Bitwise announced its XRP ETF application, the SEC appealed this decision, too, saying Ripple should be made to pay the $2 billion:

If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.

Somehow, they still haven’t gotten the message: they lost on everything that… https://t.co/1hW7xVSL9b

— Brad Garlinghouse (@bgarlinghouse) October 2, 2024

A fake XRP ETF filing earlier this year saw it jump 13%, but the real thing has resulted in a 3% price drop.

This conflict between Ripple and the SEC sets up an interesting dynamic, with many wondering how the SEC can approve an ETF of a cryptocurrency it is at the same time trying to have deemed a security. Of all the ETF applications to date, this could certainly be one of the more interesting ones.