As a seasoned crypto investor with a knack for spotting trends, I find the recent move by Bitwise to register a Delaware Trust for an XRP-tracking fund quite intriguing. Having weathered numerous regulatory storms and market fluctuations over the years, I’ve learned to keep a keen eye on such developments.
Financial company Bitwise has established a trust in the state of Delaware specifically designed to follow the fluctuations of Ripple‘s native digital currency, XRP, within an investment fund.
Bitwise, a company that deals with Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds, has applied to create an exchange-traded fund for Ripple (XRP) in Delaware. As the firm aims to broaden its cryptocurrency offerings, the following step for a possible Bitwise XRP trust would typically be submitting a registration application to the U.S. Securities and Exchange Commission.
Based on past attempts to launch cryptocurrency ETFs, it seems Bitwise could be entering a prolonged period of regulatory review. This process typically involves proposing a rule change and working closely with the SEC staff for their input. Meanwhile, another crypto ETF issuer, Grayscale, recently introduced an XRP fund for accredited investors last month.
In 2021, there’s been much discussion about how many additional digital assets might be packaged within an institutional Exchange Traded Fund (ETF) and launched on the New York Stock Exchange (Wall Street). The SEC’s hesitance towards cryptocurrencies has often been pointed out as a major hurdle for these types of products, particularly those not related to Bitcoin (BTC) or Ethereum (ETH).
As stated by the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, many cryptocurrencies fall under the category of securities. Consequently, anyone issuing these digital assets is required to register with the regulatory body. The SEC’s enforcement division has taken legal action against multiple crypto businesses, including Ripple – the creators of XRP – for what they claim are violations of securities laws.
In a court decision, Ripple secured a partial win yet was mandated to pay a penalty of $125 million. U.S. District Judge Analisa Torres found that more than 1,200 institutional sales of Ripple’s token infringed upon federal securities laws. The future implications for ETFs tied to Ripple’s cryptocurrency following this ruling are still uncertain.
Previously stated by Ripple CEO Brad Garlinghouse, the success of crypto ETFs like Bitcoin products makes more such ETFs unavoidable in the future. At Consensus 2024 in May, he anticipates the launch of an XRP ETF within the upcoming months. Additionally, Ripple intends to develop a stablecoin specifically for its own ledger and Ethereum’s blockchain.
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2024-10-01 23:04