SEC Begins Review Process for Bitwise XRP ETF Filing

TLDR

• SEC has acknowledged Bitwise’s spot XRP ETF filing submitted through Cboe BZX Exchange, joining similar proposals from Grayscale, 21Shares, WisdomTree, and Canary Capital
• The SEC review process includes a 21-day public comment period and could take up to 240 days for a final decision
• XRP is currently trading at $2.53, down 2.9% according to CoinGecko, despite growing optimism around crypto ETFs
• Bloomberg analysts give XRP ETFs a 65% chance of approval following successful Bitcoin and Ethereum ETF launches
• Industry experts warn about potential risks of launching too many crypto ETFs without sufficient institutional demand

The U.S. Securities and Exchange Commission (SEC) has acknowledged Bitwise’s filing for a spot XRP exchange-traded fund (ETF), adding to a growing list of similar proposals under review. The filing, submitted through Cboe BZX Exchange, marks the latest development in the expanding landscape of crypto investment products.

The SEC’s review process for the Bitwise XRP ETF includes a 21-day public comment period, which will begin once the filing is published in the Federal Register. The regulator can take up to 240 days to make a final decision on whether to approve or deny the application.

Bitwise’s proposal joins several other XRP ETF applications currently under consideration. The SEC has already acknowledged similar filings from Grayscale and 21Shares, while proposals from WisdomTree and Canary Capital remain in the review pipeline.

The proposed Bitwise ETF includes specific measures to protect investors and prevent market manipulation. These safeguards involve sourcing XRP prices exclusively from U.S.-compliant trading platforms and implementing a structured creation and redemption process to help prevent fraudulent activities.

The timing of these applications comes as the crypto investment landscape continues to evolve under the Trump administration. The successful launches of Bitcoin and Ethereum ETFs have paved the way for asset managers to explore similar investment vehicles for other digital assets.

Bloomberg ETF analysts James Seyffart and Eric Balchunas have expressed optimism about the prospects of XRP ETFs, assigning them a 65% chance of approval. This positive outlook reflects the growing acceptance of crypto-based investment products in traditional financial markets.

NEW: @EricBalchunas and I took a look at the filings for spot crypto ETFs. We're putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now.

Here's the table with the odds and some other details: pic.twitter.com/xaXaNXLb0M

— James Seyffart (@JSeyff) February 10, 2025

The Race for XRP ETFs

Despite the increasing momentum behind crypto ETFs, the market response has been measured. XRP’s price currently stands at $2.53, showing a 2.9% decline according to CoinGecko data, even as optimism around crypto ETFs grows.

XRP Price on CoinGecko

The Cboe Exchange has taken a leading role in the push for XRP ETFs, submitting four separate applications to the SEC on behalf of WisdomTree, Bitwise, 21Shares, and Canary. These submissions demonstrate the strong interest from major asset managers in launching the first spot XRP ETFs in the United States.

However, some industry experts urge caution. Katalin Tischhauser, Head of Research at Sygnum Bank, warns that not all cryptocurrencies are suitable for ETF products. She emphasizes the importance of having healthy demand from institutional investors before launching new crypto investment vehicles.

The creation and redemption process proposed in these ETF applications aims to maintain fair pricing and prevent market manipulation. This mechanism allows authorized participants to create or redeem ETF shares in exchange for the underlying asset, helping to keep the ETF’s price aligned with XRP’s market value.

If approved, these XRP ETFs would offer investors a regulated way to gain exposure to the world’s third-largest cryptocurrency without directly holding the digital asset. This could make XRP more accessible to traditional investors who prefer to work within established financial frameworks.

The review process for these ETF applications involves careful examination of various factors, including market surveillance, custody arrangements, and investor protection measures. The SEC will assess each proposal’s ability to prevent fraudulent activities and maintain orderly markets.

Tischhauser points out that tokens with lower trading volumes can experience higher volatility, potentially leading to larger losses than institutional investors typically expect. This volatility risk could impact the demand for access to additional crypto assets through ETF products.

The regulatory acknowledgment of these filings represents another step in the evolution of crypto investment products. However, the SEC’s final decisions will depend on each proposal’s ability to meet established investor protection standards and address regulatory concerns.

The most recent development in this story is the SEC’s acknowledgment of Bitwise’s filing, which now awaits publication in the Federal Register to begin its formal review period.

The post SEC Begins Review Process for Bitwise XRP ETF Filing appeared first on Blockonomi.