Asset manager WisdomTree recently filed for a Delaware trust entity, a pre-launch step to launch an exchange traded fund (ETF), focused on XRP.
If approved, the ETF would track XRP’s price, expanding institutional investors’ access to digital assets. The filing fits in with the trend of crypto ETFs changing investment opportunities.
XRP reacted positively and was up nearly 7% in the last 24 hours, to $1.47 at the time of publication. It was one of the top-performing assets among the top 10 cryptos by market capital for the day. The asset retained almost all its recent gains, despite the wider market decline.
Uncertainty about the law
XRP’s journey to becoming an ETF-backed asset faces significant legal and regulatory hurdles.
Ripple, the company that issued XRP, is still embroiled in a dispute with the US Securities and Exchange Commission. The SEC claims XRP was offered as a security not registered.
While Ripple scored a partial legal victory in 2023 — securing a ruling that retail XRP sales did not violate securities laws — the SEC appealed, keeping regulatory uncertainty in play.
Brad Garlinghouse, Ripple’s CEO, expressed optimism despite the challenges regarding XRP ETFs. He cited strong demand as a reason for his optimism. He said:
“Since Bitcoin ETFs launched earlier this year, billions have flowed into these funds, highlighting institutional appetite.”
The recent resignation of SEC chair Gary Gensler following President Donald Trump’s victory in the US elections has heightened optimism in the market that the new administration will likely end the constrictive regulatory uncertainty that has stifled the industry’s growth in the US.
Crypto ETFs are expanding.
WisdomTree, a firm that manages assets worth $113 billion, is seeking to join firms such as Bitwise and Canary Capital by approving XRP ETFs.
WisdomTree’s filing adds to a growing list of crypto ETF proposals as the market diversifies. Bitwise filed an application last week for a Solana-based ETF. 21Shares also recently submitted the 21Shares Core XRP Trust to be listed on the Cboe BZX Exchange.
Analysts think these filings are a strategic move to meet institutional demands while waiting for clearer regulatory frameworks.
Nate Geraci is the President of ETF Store.
“The move demonstrates foresight amid evolving crypto adoption.”
ETFs are a way for institutional investors who want to invest in digital assets to gain access as crypto becomes more mainstream. The launch earlier this year of Bitcoin ETFs marked a key moment. Significant inflows highlighted the appeal.
However, the approval of XRP ETFs remains contingent on resolving Ripple’s legal challenges. The broader market will continue to navigate the complex regulatory environment until then. Firms like WisdomTree are positioning themselves for future growth.
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