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The legal drama between Ripple and SEC is yet to climax, despite which Canary Capital is making waves in the financial world by filing for an XRP exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). This move marks them as the second firm in just a few weeks to do so, following closely behind Bitwise Asset Management. It’s clear there’s growing interest in bringing XRP into the hands of institutional and retail investors in a more accessible way.
The proposed ETF would open the doors for investors to get a slice of the XRP pie without diving into the complicated waters of direct cryptocurrency purchases. It removes the headache of dealing with security risks and custody issues. Simply put, it streamlines access to XRP, which has already cemented itself as a key player in enterprise blockchain technology.
Demand is Heating Up for XRP ETFs
So, why now? The timing of Canary Capital’s filing suggests that optimism around XRP’s potential is on the rise, even if regulatory uncertainties still loom large. Both Canary and Bitwise are angling for a strong foothold in this rapidly evolving crypto market, tapping into the growing appetite of investors who want exposure to more than just Bitcoin and Ethereum.
Steven McClurg, the brains behind Canary Capital, highlighted that point. He said investors are getting more sophisticated in how they approach digital assets, and they want easier, safer ways to get their hands on things like XRP. Having previously founded Valkyrie Funds, a company that also dabbles in crypto-based ETFs, McClurg adds a layer of credibility to Canary’s bold venture.
Ripple’s Legal Drama Isn’t Over
That said, Canary Capital’s enthusiasm for XRP comes with a side of caution, thanks to Ripple’s ongoing legal saga with the SEC. Back in July 2023, a federal judge ruled that Ripple’s sales of XRP to institutional investors were indeed unregistered securities offerings. However, XRP transactions on secondary exchanges managed to dodge that bullet. The SEC didn’t take that ruling lying down and has since appealed, which means the future of XRP’s legal status is still up in the air.
This regulatory uncertainty throws a wrench in the approval process for any XRP-linked ETF. If the SEC wins its appeal, XRP ETFs might be stuck in limbo, with approvals delayed until 2025 or beyond. While Bitcoin and Ethereum have successfully navigated the SEC’s red tape to launch spot ETFs, XRP may face a bumpier road ahead.
The Road Ahead for XRP ETFs
Even with these legal challenges hanging over them, Canary Capital is keeping its eyes on the prize. The firm plans to use a mix of cold and hot wallets to keep XRP secure and shares will be created and redeemed in large batches through authorized participants—similar to how other successful cryptocurrency ETFs operate. This should help ease the concerns of investors worried about security and regulatory compliance.
Currently, XRP is trading at the $0.052 level, according to CoinGecko data. However, the price has dropped significantly after the appeal filing by the SEC. Ripple rose by 15%, reaching the $0.064 level after Bitwise’s XRP ETF approval. However, not all hope is lost. As per the CryptoNewsZ Ripple Price Prediction, XRP is bound to breach the $0.77 mark by November.
If the ETF does get the green light, it will track XRP’s value using the CME CF Ripple, providing investors with a more straightforward way to invest in XRP via traditional financial platforms. But, until the legal dust settles, the future of XRP ETFs remains murky at best.