In a significant step for the crypto investment, 21Shares has filed with the U.S. Securities and Exchange Commission (SEC) to list a spot XRP exchange-traded fund (ETF) on the Cboe BZX Exchange. This application follows similar moves by Bitwise and Canary Capital, marking 21Shares as the third asset manager aiming to introduce a spot XRP ETF in the United States. The 21Shares XRP ETF application could pave the way for other crypto investment opportunities.
21Shares’ Strategic Entry into the Spot XRP Market
On November 1, 21Shares officially submitted a Form S-1 with the SEC for its Core XRP Trust, an investment vehicle intended to provide indirect exposure to XRP for investors. While the ETF won’t directly hold XRP tokens, it allows investors to engage with the XRP market through a regulated and accessible platform. If the SEC gives the green light to the 21Shares XRP ETF application, Coinbase Custody Trust Company will act as the official custodian for the XRP in the trust.
The SEC’s Cautious Stance on Spot ETFs
The SEC’s decision on 21Shares’ application remains uncertain. Despite approving spot ETFs for Bitcoin and Ether this year, the regulator has yet to respond to spot XRP proposals. This hesitation may stem from the SEC’s ongoing lawsuit against Ripple Labs, where a federal court previously ruled that XRP’s sales on exchanges were not securities. The case continues with appeals, leaving the regulatory environment for XRP ETFs complex and evolving. The 21Shares XRP ETF application is part of this changing landscape.
A Trend Among Asset Managers: Expanding Beyond Bitcoin and Ether ETFs
Since approving spot Bitcoin ETFs in January, various asset managers have explored ETFs for other crypto assets. Besides XRP, Solana and Litecoin ETFs applications have also been filed, reflecting the industry’s push for diverse crypto-backed investment products. VanEck, 21Shares, and Canary Capital are among the key players seeking to capitalize on the growing demand for spot crypto ETFs tied to assets other than Bitcoin and Ether. The 21Shares XRP ETF application marks a pivotal moment in this trend.
Potential Changes in SEC Leadership Could Impact Approval Process
The regulatory approach to these ETF applications may shift depending on the outcome of the 2024 U.S. elections. Some political analysts suggest that new SEC leadership could arrive if Kamala Harris or Donald Trump, both contenders for the U.S. presidency, were to replace current SEC Chair Gary Gensler. This possibility has spurred speculation that the SEC’s stance on crypto-related investment products might evolve with new administration perspectives.
What’s Next for 21Shares’ XRP ETF Proposal?
The SEC can delay its decision, open the matter to public comments, or approve the application. The timeline for these actions could extend for several months, creating an uncertain landscape for asset managers and investors eager to see new crypto ETFs introduced. If approved, the 21Shares XRP ETF application could open doors to a broader audience and further legitimize the presence of crypto assets in mainstream financial markets.
Conclusion
With a wave of interest surrounding crypto ETFs, 21Shares’ move to apply for a spot XRP ETF reflects the growing appetite for digital asset investment and the current regulatory hurdles. As the SEC continues to review these applications, the outcome will likely set the tone for future crypto-backed ETFs and investment opportunities in the U.S. The 21Shares XRP ETF application is pivotal in this ongoing process.
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