Bitwise, a digital asset management firm, has officially submitted an application for a Ripple (XRP) exchange-traded fund (ETF) in the state of Delaware.
The entity, named Bitwise XRP ETF, was officially established on September 30th, according to records from the State of Delaware’s division of corporations.
While experts in the ETF field have verified the legitimacy of the application, they have noted that this submission does not equate to formal filing with the U.S. Securities and Exchange Commission (SEC).
Despite this, industry analysts have widely regarded the introduction of an XRP ETF as an ‘inevitable’ development.
Response from the Community to the XRP ETF Application
Nate Geraci, a respected ETF professional and president of ETF Store, has praised Bitwise’s decision to file for an XRP ETF as ‘strategic’ and suggestive of the possible outcomes of the upcoming U.S. election. In his opinion,
“Bitwise’s move to apply for an XRP ETF is strategically significant in my view… At present, this could be seen as a bet on the November election… This is a tactical decision.”
It is widely anticipated among market participants and industry experts that increased regulatory clarity within the cryptocurrency space will follow the conclusion of the U.S. elections.
If this expectation materializes, it is likely that the regulatory status of numerous tokens, previously considered securities by the SEC, will be officially defined.
Geraci’s view was reinforced by the notion that Bitwise acted preemptively, considering the inevitability of an XRP ETF post-election.
“The fact remains that an XRP ETF will probably emerge at some point… Bitwise is simply ahead of the curve. In the short term, political elements are clearly influential, but I believe this evolution is unavoidable over time.”
Legal Battle: SEC vs. Ripple Labs
Ripple Labs, the company behind the XRP token, has been embroiled in a legal dispute with the SEC since 2020, marking one of the most closely monitored cryptocurrency lawsuits.
The SEC alleged that Ripple had breached securities regulations by distributing XRP tokens to investors without proper registration. The regulator sought a penalty of $2 billion.
However, Judge Analisa Torres ruled that XRP was classified as a security solely during sales to institutional investors, not the general public. Consequently, the court mandated Ripple to pay a reduced fine of $125 million for failing to register the institutional transactions with the SEC.
Both Ripple Labs and the broader market considered this ruling a partial victory. However, the outcome remains inconclusive as the SEC has until October 7th to contest the judge’s decision.
As of the latest data, XRP was priced at $0.60, marking a nearly 10% decline since October 1st amidst an overall market downturn triggered by escalating tensions in the Middle East.
The recent announcement by Bitwise appears to have had a limited impact amid the risk-averse sentiment prevailing among investors.