The upcoming US presidential election is expected to have a significant impact on the popularity of spot crypto ETFs.
In addition, the recent Securities and Exchange Commission appeal against the Ripple case could hinder the approval of these funds by regulators.
Bitwise, an investment firm, filed a Tuesday for a Ripple ETF. According to the Delaware Corporation website, Canary Capital filed for a product similar to this.
Bitwise’s press release on Tuesday stated that XRP is the digital asset which powers the XRP Ledger, a public blockchain. XRP facilitates cross-border payment and remittances. XRP ranks seventh on the list of crypto tokens with a market cap of approximately $33 billion.
“Bitwise, well known for its crypto expertise, will likely launch this product in the future,” Neena Mohshra, Zacks Investment Research’s director of ETF Research. “Politics will determine whether this happens soon or in a few years.”
Mishra said Bitwise was preparing the product for the event that Donald Trump won the presidential election. The Republican candidate noted in July, that he, should he be elected, would fire SEC Chairman Gary Gensler.
“If Harris wins and Gensler remains SEC chair, the filing has no chance of approval, despite her recent comments about supporting digital assets,” Mishra said Blockworks.
Mishra’s thinking is similar to that of Matthew Sigel, who was the VanEck representative when his company filed for solana ETFs in June. He noted that filing for an solana ETF in June was like betting on Trump winning the election.
Sigel didn’t want to comment about the Bitwise S-1 latest version, noting: “We like SOL a lot more than XRP.”
SEC appeal as potential hurdle
Bitwise submitted its application just before SEC decided that it would appeal the decision of Judge Analisa Turres in RippleLabs.
Torres ruled that Ripple’s programmatic sales counted against the unregistered offering of securities. Then, in August, the court ordered Ripple to pay a $125 million penalty — far below the $2 billion the SEC had sought.
The SEC’s approval or denial of the Bitwise XRP Exchange Traded Fund (ETF) is based on the publication date in the Federal Register. However, it remains unclear what happens after the SEC appeals.
In either case, observers have indicated that the action of the agency would cause a delay in determining XRP’s current status and could impact planned ETFs which hold this asset.
Alex Thorn of Galaxy Digital, the head of Research noted in a post on Tuesday X about Bitwise’s XRP Exchange Traded Fund. “succeeding” Would drop to “near zero” The SEC may choose to appeal.
Bitwise’s XRP-ETF is the most recent US fund planned to directly hold a cryptoasset.
US-based exchanges began listing spot ETFs for bitcoin in January, and then ether in July. VanEck, 21Shares and others have announced plans to introduce spot funds for solana.
Some segment observers previously told Blockworks that spot crypto ETF approvals by the SEC — outside of BTC and ETH — might be tough given the precedent of the regulator wanting to first see a regulated futures market. There is no ETF for either XRP, or Solana.
The plans from Bitwise, Canary and others seem to confirm the perception that US crypto regulation is changing.
Canary Capital’s spokesperson confirmed that Bitwise has declined to make any comments on this. “encouraging signs of a more flexible regulatory environment.”
He added: “This year’s approval of the spot Ethereum ETFs, following the earlier spot bitcoin ETF approvals, signals positive momentum, especially considering how long it took for ETH futures products to be approved. We’re optimistic about the next phase of developments in the space.”
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