WisdomTree Files for Ripple (XRP) ETF in Delaware

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As a seasoned crypto investor with a decade of experience navigating the ever-changing landscape of digital assets, I can’t help but feel a mix of excitement and cautious optimism regarding WisdomTree’s recent filing for an XRP exchange-traded fund (ETF). Having witnessed the journey of Bitcoin ETFs and Ethereum ETFs before them, I am well aware that the road ahead is far from smooth.

On November 25, WisdomTree Funds submitted the necessary documentation for approval in Delaware. This move brings them closer to introducing an exchange-traded fund (ETF) based on Ripple‘s digital asset, XRP.

As a crypto investor, I first learned about this intriguing development when Fox Business journalist Eleanor Terrett broke the news. She posted on social media, confirming that an asset management firm had indeed filed a document related to Bitcoin ETF. This confirmation adds credibility to the report and keeps the anticipation high for potential approval.

WisdomTree’s Filing

Beginning this submission, WisdomTree is entering the first stage of obtaining regulatory clearance for the XRP ETF. Progress requires them to file a formal S-1 document with the Securities and Exchange Commission (SEC), thereby triggering the official evaluation period.

The company joins other industry players such as Bitwise, Canary Capital, and 21Shares in the race to introduce an XRP ETF in the United States. WisdomTree is not new to crypto-based ETFs, having received approval from the commission for a spot Bitcoin ETF and currently managing an Ethereum ETF that trades in European markets.

The potential for a spot XRP ETF has been a topic of interest in the crypto industry. Ripple’s CEO, Brad Garlinghouse, has been a vocal advocate for such a product, recently emphasizing his belief in the inevitability of altcoin ETFs, including one for XRP.

Last week, Nate Geraci predicted a surge in spot crypto ETF filings, citing pro-crypto regulatory momentum following Donald Trump’s return to the White House. Geraci called the current climate an “optimal moment” for providers to act. The WisdomTree filing appears to align with this forecast.

Regulatory Challenges and Timeline Delays

Nonetheless, the path forward is not yet well-defined. James Seyffart of Bloomberg has expressed caution in an interview regarding regulatory challenges for altcoin ETFs such as XRP. Unlike Bitcoin and Ethereum, which were boosted by their ties to CME-regulated futures markets, altcoins lack a clearly defined framework at this point.

As an analyst, I’ve observed that without a substantial and regulated market, the Securities and Exchange Commission (SEC) has typically turned down applications for altcoin ETFs. Crucial aspects like market manipulation, safekeeping, and compliance need to be tackled first before these products can progress.

He also highlighted the difference between filing processes for ETFs. While the 19b-4 rule filings initiate a formal review period with fixed deadlines, S-1 filings like WisdomTree’s XRP ETF application lack strict timelines. This difference means that altcoin ETF applications could face extended delays, with decisions potentially stretching into late 2025.

Furthermore, the analyst pointed out that shifts in the SEC’s leadership might influence the pace of approvals. He clarified that with current chair Gary Gensler planning to depart in January, a potential new leader could potentially expedite the process, but it remains uncertain to what extent these changes will impact the timelines.

Seyffart additionally pointed out that ETFs with a multi-asset index such as Grayscale’s GDLC and Bitwise’s Crypto 10 Index could potentially encounter fewer issues given their significant emphasis on Bitcoin and Ethereum. Nonetheless, the approval from the SEC hinges upon whether the minor allocations of altcoins adhere to compliance regulations.

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2024-11-26 14:12