Bitwise Takes Major Step Towards XRP Exchange-Traded Fund
Bitwise Asset Management has made a significant move in the cryptocurrency market by submitting an S-1 form to the U.S. Securities and Exchange Commission (SEC). This filing is a crucial requirement for companies looking to issue a new security and list it on a public stock exchange. The S-1 form submission indicates Bitwise’s intention to launch an exchange-traded fund (ETF) tied to XRP, a cryptocurrency associated with Ripple and recognized as one of the largest digital assets globally.
Bitwise’s CEO, Hunter Horsley, announced this filing in a post on X, expressing the company’s belief in the enduring value of XRP for investors. He stated, “Today we filed an S-1 for a Bitwise XRP ETP! For more than a decade, XRP has been an enduring crypto asset that many investors want exposure to.” This sentiment reflects the growing demand for diverse cryptocurrency investment options, especially among institutional and retail investors who are increasingly looking for regulated ways to gain exposure to digital assets.
The timing of this filing is particularly noteworthy, as it came just a day after Bitwise registered a trust entity named “XRP ETF” in Delaware. This move is indicative of the company’s serious intentions and strategic planning. Delaware is a popular state for companies to establish legal entities, largely due to its business-friendly laws. Notably, many crypto ETF issuers have historically signaled their future plans through similar Delaware filings, suggesting that Bitwise is following a well-trodden path in the industry.
The Significance of XRP in the Cryptocurrency Landscape
XRP currently ranks as the seventh-largest cryptocurrency by market capitalization, valued at approximately $33 billion, according to CoinDesk data. Its prominence in the market positions it as a viable candidate for an ETF, especially as investors are increasingly seeking opportunities beyond Bitcoin (BTC) and Ethereum (ETH), which have already been made available through ETFs earlier this year. The introduction of an XRP ETF could provide a new avenue for investors to diversify their cryptocurrency portfolios.
However, it is essential to understand that the submission of an S-1 filing is just the initial step in launching a new fund. Following the S-1, a critical subsequent filing called the 19b-4 must be submitted to indicate a proposed rule change at the stock exchange that seeks to list the investment. This is where the complexity of the approval process increases. Unlike the 19b-4 filing, which comes with a strict timeline for the SEC to respond, the S-1 filing does not impose any obligation on the SEC to act within a specific timeframe. As a result, the approval process could extend for years, leaving companies in a state of uncertainty.
For instance, VanEck filed an S-1 to launch an ether ETF back in 2021, but it took more than three years for the fund to finally hit the market in July 2024. This example underscores the lengthy and often unpredictable nature of regulatory approvals in the cryptocurrency sector.
Industry Expert Insights
The effort by Bitwise to establish a fund that tracks XRP is being hailed as a highly noteworthy initiative within the industry. Nate Geraci, president of the ETF Store, commented on the filing, stating, “Bitwise is a highly credible crypto-native fund firm that doesn’t just throw stuff at the wall.” This remark highlights the reputation Bitwise has built for itself in the cryptocurrency investment space, as it is known for its meticulous approach to fund creation and management.
As the landscape of cryptocurrency investment continues to evolve, the introduction of an XRP ETF could mark a pivotal moment for both investors and the broader crypto market. It could potentially lead to increased institutional investment in XRP and similar digital assets, further legitimizing cryptocurrencies in the eyes of traditional investors. The success of such an ETF could also pave the way for more crypto-related financial products, which would cater to the growing appetite for regulated investment options in the digital asset space.
In conclusion, Bitwise’s filing for an XRP ETF reflects a broader trend of established financial firms entering the cryptocurrency market. As regulatory frameworks continue to develop, the potential for ETFs tied to various cryptocurrencies is becoming more tangible, offering investors new opportunities for diversification and access to digital assets.