US-based asset manager 21Shares has taken a step that crypto investors have been waiting for a long time. The first spot XRP coin has filed for an exchange-traded fund (ETF) in the United States. This new ETF, called “Core XRP Trust”, aims to provide investors with indirect access to XRP if approved. The fund’s XRP assets are planned to be held by Coinbase Custody, one of the leading crypto exchanges in the United States.
Critical move for XRP coin
Overnight, 21Shares filed an ETF application for the XRP coin. The impact of this application on crypto markets and its potential repercussions on future XRP price fluctuations have already aroused widespread interest. Additionally, this development comes after UK-based asset manager Jupiter Asset Management pulled out of an XRP product managed by 21Shares about seven months ago due to compliance concerns. Although the US Securities and Exchange Commission (SEC) has adopted spot ETFs for Bitcoin and Ethereum, it has not taken the same step for other crypto assets such as XRP. It is thought that the long-standing legal struggle between the SEC and Ripple Labs is at the root of this situation.
A federal judge had previously ruled that scheduled sales of XRP on exchanges should not be considered securities. However, since this decision is currently under appeal, a final result has not been reached. Ripple had to pay a $125 million penalty as a result of this ongoing legal battle with the SEC in August. This penalty was upheld on the grounds that Ripple’s corporate sales violated federal securities laws. In November 2023, a fake application under the name “BlackRock iShares XRP Trust” led to a sudden increase in the price of XRP, but it was quickly denied. Still, this event stands out as an important example of investor interest in XRP.
Many XRP applications have been made this year
Starting in early 2024, VanEck and other asset managers such as Canary Capital have filed for spot Solana and Litecoin ETFs, an indication of an effort to diversify cryptocurrency investment options in regulated markets. A wider presence of XRP in the markets as a regulated investment instrument could present significant opportunities for investors. Although there is an expectation among crypto investors for these developments, it is noteworthy that the SEC takes a cautious approach in the process of approving XRP ETF applications. The possibility of the SEC delaying its final decision by waiting for the outcome of the Ripple case is not excluded.
It is estimated that if Kamala Harris or Donald Trump wins in the 2024 US presidential elections, there may be a change in the leadership of the SEC. This potential leadership change could impact the SEC’s decisions on crypto ETFs and lead to new regulations. Additionally, other asset managers such as Bitwise have also filed for an XRP ETF, continuing to increase the popularity of regulated crypto ETFs.
Meanwhile, Ripple’s Q3 report contains remarkable data about the market situation of XRP. According to the report, the amount of XRP held by Ripple decreased by 5.24% in the third quarter. Ripple’s escrow reserve has decreased to 38.9 billion XRP. This shows that the reserve, which was around 55 billion XRP in 2017, has decreased significantly over the years. The report states that XRP gained 31.07% against Bitcoin, but overall the XRP price failed to maintain its resistance.
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