The crypto landscape keeps changing, and now Swiss-based cryptocurrency exchange-traded fund (ETF) issuer 21Shares is attempting to provide American investors with the opportunity of investing in XRP. The firm filed its S-1 form on Friday with the U.S. Securities and Exchange Commission, showing intentions to launch an XRP ETF. This happens while interest in cryptocurrency investment products grows, especially following recent approvals from Bitcoin and Ethereum ETF.
The 21Shares Core XRP Trust is a new proposal meant to give investors access to XRP, the seventh largest by market capitalization cryptocurrency. ETF shares will be traded throughout the day and represent an easy channel to have a direct investment in digital assets without directly holding them. In a statement, 21Shares revealed that the urge to take innovation to the market was the impetus for efforts to grow access among U.S. investors for the cryptocurrency asset class.
The Competitive Landscape for XRP ETFs
XRP is a product from the makers of Ripple, a fintech firm with expertise in secure, instantaneous, and inexpensive cross-border payments. Although XRP technology is very powerful and will disrupt traditional banking systems, the SEC has paid major regulatory attention to it. This famous case is being filed against Ripple Labs for selling unregistered securities.
21Shares is not the only asset manager with ambitions to launch an XRP ETF. Bitwise and Grayscale, the leading players in the crypto space, have filed for such a product and just launched its XRP Trust. It has already converted two of its closed-end funds on Bitcoin and Ethereum into ETFs once approved by the SEC. The increasing number of firms that are pursuing XRP ETFs indicates there’s budding interest in this asset class that may soon be able to provide a diversified entry point into the cryptocurrency market for investors.
Ripple’s Ongoing Legal Battle with the SEC
21Shares and the other companies preparing XRP ETFs will also face court battles with Ripple. For a long time now, the SEC has been in a lawsuit battle with Ripple Labs over its alleged sales of $1.3 billion in unregistered securities. However, Ripple gained partial victory last year as a judge ruled that programmatic sales of XRP to retail investors were not security.
Despite all these legal and technical hurdles, XRP-ETFs saw a very hopeful future perspective with the leadership of Ripple. Bitwise has recently filed for a bit of an XRP ETF. If approved, this will offer investors something quite unique in terms of getting exposure to XRP without necessarily holding the actual digital asset.
Implications of SEC Actions
In regard to the SEC actions against Ripple, which also included the filing of a $2 billion fine, pressure against scrutiny of the regulatory environment around cryptocurrencies has increased. Although a New York court ruled to inflict a penalty of $125 million against Ripple, the SEC filed an appeal. “Stuart Alderoty, chief legal officer for Ripple, believes that the ultimate appeal would work in their favour by further strengthening the crypto industry.”
One of the most significant developments in the continued evolution of cryptocurrency investment products has been 21Shares’s recent filing for an XRP ETF. While regulatory changes continue to sweep over the industry, it has increasingly become plausible that XRP ETFs may take hold. Ripple is still engaged in ongoing legal battles with the SEC, and if the court rules in their favour, the prospect of XRP and the products based on it will continue to be the first consideration of investors when looking for a way to profit from the increase in the price of cryptocurrencies. An XRP ETF might eventually ensure that cryptocurrencies gain acceptance within traditional financial markets as their popularity continues to increase.
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