21Shares Files for SEC Approval of U.S. XRP ETF Bringing Hopes to Crypto Investors

21Shares Files for SEC Approval of U.S. XRP ETF Bringing Hopes to Crypto Investors

On November 1 financial services firm 21Shares officially submitted a filing to the U.S. Securities and Exchange Commission (SEC) seeking approval for a U.S.-based exchange-traded fund (ETF) focused on XRP. The proposed fund named the 21Shares Core XRP Trust aims to be listed on the Cboe BZX Exchange with Coinbase Custody Trust Company designated as its custodian.

The introduction of an XRP ETF would enable investors to track the performance of XRP providing a novel investment vehicle for institutional players looking to gain exposure to this digital asset. 21Shares is the third firm to seek SEC approval for an XRP ETF joining Bitwise and Canary Capital in the growing interest surrounding cryptocurrency ETFs.

The momentum for an XRP ETF aligns with recent comments from Ripple CEO Brad Garlinghouse who referred to the establishment of an XRP ETF as “inevitable” indicating a burgeoning demand for such financial products. The successful rollout of Bitcoin and Ethereum ETFs has set a favorable precedent enhancing the optimism surrounding XRP’s potential entry into this investment space.

However the pathway to SEC approval for an XRP ETF is fraught with challenges particularly due to the ongoing regulatory scrutiny and legal complexities surrounding Ripple Labs which impact the classification of XRP. The SEC has contended that Ripple’s sales of XRP were unregistered securities a claim that Ripple has vehemently contested. Last year Judge Analisa Torres of the U.S. District Court for the Southern District of New York issued a partial ruling indicating that certain programmatic sales of XRP did not violate securities laws due to their blind bid nature while affirming that direct institutional sales did qualify as securities.

Despite these hurdles the growing interest in crypto ETFs signifies a strong market appetite for innovative investment solutions. The SEC’s previous approvals of spot Bitcoin and Ethereum ETFs earlier this year have sparked a wave of applications from various firms aiming to capitalize on the expanding crypto market. In January the SEC greenlit 11 spot Bitcoin ETFs followed by the approval of eight Ethereum ETFs. Firms such as VanEck and 21Shares have since filed for ETFs linked to additional cryptocurrencies like Solana and Litecoin.

The anticipated approval of the XRP ETF could mark a significant milestone in the evolution of crypto-based financial products in the U.S. market positioning it as the third cryptocurrency ETF to launch in 2024 and broadening investment options for participants in the dynamic digital asset landscape.