Canary Capital Group Files for Spot XRP ETF Following Bitwise's Recent Submission to SEC

Canary Capital Group Files for Spot XRP ETF Following Bitwise's Recent Submission to SEC

Crypto investment firm Canary Capital Group has officially submitted its proposed exchange-traded fund (ETF) for XRP to the US Securities and Exchange Commission (SEC). This filing comes just a week after asset manager Bitwise made its own application for an ETF that tracks the same digital asset.

According to a Bloomberg report the Canary Spot XRP ETF represents the firm’s inaugural ETF offering and is designed to provide investors with exposure to XRP. The paperwork was filed with the SEC on Tuesday and reflects a growing trend in the cryptocurrency market as more firms seek to capitalize on investor interest in digital assets.

Steven McClurg the founder of Canary Capital and former co-founder of Valkyrie Funds described the filing as a result of a more progressive regulatory environment and increasing demand from investors. The filing outlines that the Trust's investment objective aims to provide exposure to the value of XRP held by the Trust after accounting for operational expenses and other liabilities.

The fund is structured to allow investors to access the Ripple-issued token through a traditional brokerage account thereby eliminating potential barriers that may be associated with direct cryptocurrency investments. Canary Capital has indicated that its XRP ETF will track the token’s performance using the Chicago Mercantile Exchange (CME) CF Ripple index.

The recent surge in XRP ETF filings coincides with the SEC's approval of spot ETFs for Bitcoin and Ethereum two of the largest cryptocurrencies by market capitalization earlier this year. Since January spot Bitcoin ETF products have attracted nearly $19 billion in investments while Ether ETFs have seen outflows totaling $550 million.

On October 2 Bitwise submitted its own application for an XRP ETF to Delaware’s Division of Corporations. Additionally Grayscale recently announced its intentions to launch an XRP Trust investment product with plans to convert it into an ETF eventually.

The context for these developments is shaped by the outcome of the legal battle between Ripple Labs and the SEC which concluded with a landmark ruling in July 2023. The court determined that XRP is not classified as a security on its own which significantly impacted the XRP market and drove prices upward.

In August a federal judge ordered Ripple Labs to pay $125 million in civil penalties effectively concluding a nearly four-year legal dispute. The judge also mandated that Ripple refrain from further violations of securities law.

Despite the SEC's appeal in this lawsuit analysts have noted that XRP's fundamentals remain strong. One strategist pointed out that the token's price is not dependent on the lawsuit's outcome emphasizing that the market's dynamics for Ripple and XRP remain unchanged. Another analyst Oscar Ramos expressed bullish sentiments towards XRP citing the token’s lack of security status as his reason for increasing his holdings.