SEC is seeking public comments on the XRP ETF application from WisdomTree
The SEC has started collecting public comments on applications for exchange-traded funds (ETFs) based on Ether (ETH) and XRP. One such application has been submitted by WisdomTree.
In the public debate about the prospects for U.S. approval of ETFs based on Ethereum, XRP is now reemerging as a topic due to a corresponding application from WisdomTree. WisdomTree is known as a major product developer in the ETF sector and is building on Ethereum, key competitor to the existing ETF application from VanEck.
WisdomTree’s recent application aims for approval of an ETF that fully or partially settles in XRP. To keep the process transparent, the SEC has sought public input via a special website about the appropriateness and viability of such an ETF model. Crucially, the SEC asks whether it’s reasonable to consider using XRP as an investment object in an ETF, especially given the legal ambiguity surrounding XRP. Experts and the general public have 21 days to submit information.
In October, WisdomTree also submitted applications for Ethereum-based ETFs. Like the XRP ETF, WisdomTree explicitly mentions a model that utilizes futures trading for price determination. Another application from WisdomTree includes a spot market-based variant, which uses real Ethereum and XRP tokens for backing.
The approval of a Bitcoin ETF as a trailblazer
The last significant event related to cryptocurrency ETFs was Grayscale’s approval in August for the conversion of their popular Grayscale Bitcoin Trust (GBTC) into a regular spot Bitcoin ETF. The U.S. District Court criticized the SEC’s inconsistent treatment of similar products, which experts interpret as a sign of a changed mood at the SEC. However, the approval process for Grayscale’s Bitcoin ETF must now be repeated.
Analysts and market observers expect upcoming clarity on past applications for spot market-based Bitcoin ETFs. WisdomTree’s applications for Ethereum and XRP ETFs are considered attempts to capitalize should the SEC, under pressure, finally consent to cryptocurrency ETFs.
Meanwhile, skepticism persists over the acceptance of altcoin-based ETFs like XRP, given the emphasis on Bitcoin’s and Ethereum’s legal status. Nonetheless, logic dictates that a green light from the SEC for Bitcoin and Ethereum ETFs can also open the door for altcoins like XRP.
However, the concern remains on whether XRP ETFs might unintentionally involve investors in an ongoing legal battle and if they are truly transparent given the shifting legal perspectives around XRP. WisdomTree has yet to provide additional clarifications on their XRP ETF application.
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