- Bitwise has filed for the first spot XRP ETF with the US SEC, providing investors exposure to XRP’s value, minus operational costs and liabilities.
- This filing follows a previous XRP ETF Trust filing in Delaware on October 2, signalling a formal follow-through.
- Market observers are unsure if a futures market is needed for approval, similar to Bitcoin and Ethereum ETFs, but SEC Commissioner Hester Peirce suggests spot markets can exist without futures.
Bitwise, one of the largest asset managers behind several crypto exchange-traded funds (ETFs), has filed for the first spot XRP ETF with the US Securities and Exchange Commission (SEC). The trust will provide investors with exposure to XRP’s value and will reflect the coin’s value minus operational costs and liabilities, as mentioned in its application outline.
This comes a day after Bitwise filed for XRP ETF Trust in Delaware on October 2, so the formal filing is a follow-through.
Related: Most Volatile US ETF: Leveraged MSTR Fund Reaches Top 1% of Funds, Takes in $40M in Single Trading Day
If you still think all of it is just rumours, well, here’s a tweet from Bitwise’s CEO, Hunter Horsley, talking about the filing:
Is a Futures Market Needed?
Some market observers wonder if the trust would need a futures market first, the same way the SEC requested futures for Bitcoin ETFs. It doesn’t mean that a futures market is absolutely necessary for the approval of a spot ETF, but it surely makes a huge difference.
In an interview with Tony Edward, host of the Thinking Crypto Podcast, SEC Commissioner Hester Peirce weighs in on the topic, stating that spot markets are possible without their futures counterparts, but it ultimately depends on the product.
The SEC’s previous hesitation arises because crypto is largely operating in an unregulated environment. The regulatory agency, as Peirce states, is able to better gauge risk in spot crypto ETFs by studying behaviour in the more controlled futures markets. These markets operate under far more strict rules that help protect investors and offer stability not always present in the crypto world (and spot ETFs in general).
Anyway, you would think XRP’s price is mooning right now, but no. It’s actually down -9.95% in the last 24 hours, possibly due to the recent SEC appeal.
Related: Bitget Analyst Predicts XRP Rally in October, Says 30% a Possibility
Back to the filing, it states that shares in the ETF will be created and redeemed either in cash or, if regulatory approval is obtained, in-kind, but it would probably end up being in-cash rather than in-kind like the SEC demanded for Bitcoin and Ethereum ETFs.
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