As a seasoned crypto investor with over a decade of experience navigating the volatile and ever-evolving cryptocurrency market, I find the recent filing for a spot XRP ETF by Bitwise Asset Management to be an intriguing development. The strategic move aligns with the approach taken by heavyweights like BlackRock and Fidelity, adding credibility to Bitwise’s intentions.
On September 30, Bitwise Asset Management submitted an application to Delaware’s Division of Corporations for a spot XRP exchange-traded fund (ETF). This application includes registration for a Delaware statutory trust, a type of business trust recognized by Delaware state law. This action follows the lead of financial giants like BlackRock and Fidelity, who first established trust entities for Bitcoin (BTC) and Ethereum (ETH), before seeking listings and trading based on these cryptocurrencies.
The recent filing has sparked discussions within the XRP community, especially in light of past rumors regarding a supposed spot ETF by BlackRock which turned out to be fake. However, Bitwise has officially confirmed the authenticity of their latest initiative. “We can confirm this is a registration by us,” stated Matthew Hougan, Chief Investment Officer at Bitwise. He further noted, “It is a registration of a trust entity in Delaware. We can share more details and comments tomorrow.”
What Are The Chances For A Spot XRP ETF?
Nate Geraci, head of The ETF Store, gave an extensive breakdown of Bitwise’s strategy and the potential broader effects following their action through X. Geraci underscores the trustworthiness and calculated thinking behind Bitwise’s decision-making processes. “Bitwise planning to apply for an XRP ETF is quite significant in my opinion… In essence, this could be a bet on the November election outcome. However, Bitwise is a highly esteemed crypto investment firm known for its strategic moves rather than impulsive actions.
He continues to ponder over the potential political and regulatory factors that might influence the acceptance of an XRP ETF. Essentially, it’s likely that an XRP ETF will materialize at some point, with Bitwise being the early pioneer. In the short-term, politics play a significant role, but I believe this is all unavoidable in the long run. My personal opinion is that Bitwise ultimately aims to present this in an ETF format. The next stage would be complete tokenization.
Eric Balchunas, a senior ETF analyst at Bloomberg, and Alex Thorn, Head of Firmwide Research at Galaxy Digital, have emphasized that the potential for a spot XRP ETF is closely linked with the upcoming US presidential elections. They imply that the fate of this ETF could heavily rely on the political decisions made during those elections.
Balchunas expresses his perspective by drawing a financial analogy related to election outcomes. “The Fed Put is similar to the Trump Call… Investing in XRP, Solana, or other altcoins is essentially buying a low-cost option for a Trump victory, as Genz supporters will no longer be a factor and anything could happen. If Harris wins, these investments won’t be approved and the ‘option’ will prove worthless.
Thorn discusses the possibility of an appeal in the Ripple Labs vs. SEC case and its potential implications for a future spot ETF. The Securities and Exchange Commission has until October 7th to file an appeal against Judge Torres’ July 2023 decision, which found that XRP sales through exchanges were not considered securities. If the SEC chooses to appeal, the chances of a successful ETF filing become extremely slim (I would be quite surprised if they don’t appeal).
Significantly, asset manager VanEck is attempting a comparable action by proposing a Solana Spot ETF in the U.S., having filed for such an ETF on June 27 this year. Analysts within the industry suggest that the likelihood of approval for these ETFs could heavily depend on a Trump presidency.
At press time, XRP traded at $0.5991.
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2024-10-02 17:11