- Canary Capital joins Bitwise in filing for a spot in XRP ETF amid growing regulatory optimism.
- The ETF aims to provide investors with easier access to XRP without the risks of direct ownership.
- Despite these developments, XRP’s price remains stagnant, reflecting broader market challenges.
Recently, Canary Capital filed with the United States Securities and Exchange Commission to issue a spot XRP exchange-traded fund (ETF). This development is on the heels of a similar filing from last week by Bitwise. This is in line with an emerging trend where several firms are throng the marketplace to try to provide investors with new ways of exposure to digital assets.
Steven McClurg, a founder of Canary Capital, said he was optimistic about the shifting regulatory environment. He added that investors were increasingly asking for exposure to a much wider array of cryptocurrencies than just Bitcoin and Ethereum. “We’re seeing encouraging signs of a more progressive regulatory environment,” he noted.
The ETF would allow investors to trade the digital asset XRP without actually buying and holding the cryptocurrency directly via a regular brokerage account, without all the hassles and risks involved in that. In the October 8 filing, it stated that the ETF would track the prices of XRP by using the CF Ripple index provided by the Chicago Mercantile Exchange. Notably, it would avoid the usage of derivatives that may bring further risks.
XRP Price Struggles Amid ETF Hype and Market Concerns
Market performance for XRP tells a different story despite the hype on the new ETF filings. The cryptocurrency changes hands for $0.5293, up slightly in the last 24 hours but down 11% on the week. The mixed reactions of investors brought looming concerns back to the crypto market.
According to a recent report from Kaiko, market sentiment appears to remain skeptical since the price action of XRP has largely followed the broader trends impacting the crypto ecosystem.
While both Bitwise and Grayscale are expanding their digital asset offerings, the path to gaining SEC approval for a spot ETF is full of challenges. According to industry watchers, the main factor standing in the way of the SEC is the very likelihood of market manipulation. As significant offshore trading happens on unregulated exchanges, the outcome of an approved ETF is low.
Grayscale’s Position and Future Outlook
Grayscale recently re-launched its XRP trust, which signaled that it intends to navigate the complexities of the current regulatory environment. But at least for now, the chances of this particular trust getting converted into a spot XRP ETF are low for the asset manager.
The history of Grayscale’s engagement with the SEC, most notably after a successful lawsuit regarding BTC’s future, provides a roadmap for other efforts. However, the absence of a regulated futures market for Ripple’s native token greatly complicates its path toward ETF approval.
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