Bitwise has become the first company to file for an XRP exchange-traded fund. Its approval depends on Donald Trump's return to the White House. Ripple's CEO previously said an XRP ETF was “inevitable.”
Ripple bulls cheered after crypto fund manager Bitwise Asset Management filed for a spot XRP exchange-traded fund in the US.
“You've heard of the Fed put. It's like a Trump call,'' said Eric Balchunas, an analyst at Bloomberg Intelligence. Said The development took place late Tuesday on X.
In derivatives markets, call options are all-or-nothing to hit a certain price on an asset. If an asset hits the call price, it pays big.
The companies that decide to file for crypto ETF approvals — XRP, Solana or otherwise — are a real bet on Donald Trump winning the presidency, Balchunas said.
That's because Trump's victory will ensure the departure of Anti-Crypto Securities and Exchange Commission Chair Gary Gensler.
At a Bitcoin conference in July, Trump promised to fire Gensler if he won the election.
If Gensler goes, “anything is possible,” Balchunas said.
If Vice President Kamala Harris wins, no new crypto ETFs will be approved.
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“The 'call' expires worthless,” he said.
XRP is a crypto asset developed, issued and partially managed by the US-based company Ripple Labs. Crypto is pegged to facilitate faster cross-border transactions and is often listed as an upstart competitor to the Swift system.
Bitwise is the only asset manager File the application For ETF for XRP.
But this isn't the first time a firm has filed for a crypto ETF over bitcoin and ethereum.
In June, asset manager VanEck filed with the SEC for the Spot Solana ETF.
Although the SEC rejected VanEck's accompanying 19b-4 application in August, Matthew Siegel, the firm's head of digital assets research, Said The application is “in play.”
'Start the clock ticking'
Since 2020, Ripple has been fighting SEC claims that it raised $1.3 billion by selling XRP as an unregistered security.
According to the 2023 ruling, XRP was not a security when traded on public exchanges, but institutional sales violated securities laws by promising profits based on Ripple's efforts, making them investment contracts under US law.
In the US, securities must be registered to ensure full disclosure and legal protections to investors, something Ripple allegedly bypassed.
In August, the case ended with Ripple ordered to pay a $125 million fine.
Even if the judge presiding over the case ruled that secondary sales of XRP on crypto exchanges are not securities offerings, that doesn't matter to Bitwise's XRP ETF application.
“It's not about whether the SEC thinks XRP is a security,” said Katalin Tischhauser, head of investment research at crypto bank Signum. News. “The SEC's stance needs to change on what they consider an acceptable surveillance market.”
The SEC has argued in the past Spot crypto ETFs are not listed on US exchanges until there is a highly correlated, regulated futures market for the related asset.
Such a market, Tischhauser said, exists only for bitcoin and ethereum and no other crypto asset.
Bitcoin and Ethereum are the only crypto assets that have regulated futures markets on the Chicago Mercantile Exchange.
Tischhauser said Bitwise's XRP ETF application was meant to “start the clock ticking” in hopes of a change in the SEC's stance after the election.
Inevitable?
Bitwise's filing comes after Ripple Labs CEO Brad Garlinghouse said ETFs are “inevitable” for XRP and other crypto assets following the approval of Ethereum ETFs earlier this year.
“People shouldn't be exposed to just one thing,” Garlinghouse Said On Fox Business News At that time.
But it's not clear whether there's enough demand to warrant an XRP ETF.
Spot Bitcoin ETFs, launched in January, are beating expectations and attracting some attention $18 billion Fresh capital.
However, recent Ethereum ETFs have been underperforming $572 million Streams since their July launch.
Investment manager Greyscale's XRP Trust is just around the corner $1.5 million Value of assets under management, compared to above $73 million in its Solana Trust.
Since the SEC launched its lawsuit against Ripple Labs, XRP has dropped from the second-largest crypto asset to the seventh-largest.
There is Tim Craig News' Edinburgh-based DeFi correspondent. Reach out with tips at [email protected].
Related TopicsRipple (XRP)Crypto ETF
