Asset management firm WisdomTree has taken a significant step toward launching a spot XRP Exchange-Traded Fund (ETF), as its proposal officially enters the public comment phase. This marks a pivotal moment for XRP’s role in the institutional investment landscape, as the U.S. Securities and Exchange Commission (SEC) continues to assess various cryptocurrency-related ETF applications.
Public Comment Period Begins
The Federal Register has formally published WisdomTree’s XRP ETF proposal, initiating a 21-day public commentary window. This period allows investors, financial institutions, and industry experts to submit feedback regarding the potential impact and viability of the ETF.
Public commentary is a crucial phase in the SEC’s review process, providing regulators with industry insights before making a decision. This development suggests that WisdomTree’s proposal has met the initial criteria required for further regulatory scrutiny.
SEC’s Review Process and Timeline
Once the public comment period concludes, the SEC will conduct a comprehensive assessment of WisdomTree’s ETF application. The regulatory body will evaluate factors such as:
- Compliance with securities laws
- Market integrity and investor protection measures
- Potential risks associated with XRP’s volatility and legal status
The SEC has the authority to extend its review process by an additional 90 days before reaching a final decision. Given the agency’s historical reluctance toward cryptocurrency-based ETFs, market participants are closely watching how regulators will handle this application.
The Broader XRP ETF Landscape
WisdomTree is not the only entity pursuing an XRP-based ETF. Several asset managers are attempting to capitalize on the growing demand for regulated cryptocurrency investment vehicles, particularly after the recent approval of spot Bitcoin ETFs.
Unlike Bitcoin, however, XRP has faced regulatory challenges due to its legal battle with the SEC. The commission previously alleged that XRP was sold as an unregistered security, leading to a lengthy lawsuit with Ripple Labs. A partial court victory for Ripple in 2023 clarified some aspects of XRP’s status, but uncertainty remains regarding institutional sales of the asset.
Market Implications of an XRP ETF
If approved, a spot XRP ETF could have profound implications for the crypto market. Potential benefits include:
- Increased institutional adoption: A regulated ETF would provide large investors with exposure to XRP through traditional financial markets.
- Enhanced liquidity: More trading volume could contribute to price stability and market depth.
- Regulatory clarity: Approval from the SEC would reinforce XRP’s legal standing and potentially set a precedent for future crypto ETFs.
However, given the SEC’s cautious stance on crypto ETFs, there is no guarantee of approval. The regulator may request additional justifications, delaying the process further.
The Future of XRP in Traditional Finance
WisdomTree’s XRP ETF proposal is part of a broader trend of asset managers integrating crypto into mainstream finance. With Bitcoin ETFs already gaining traction, firms are now looking to diversify their crypto investment offerings.
If the SEC eventually approves an XRP ETF, it could open the door for other altcoin ETFs, including Ethereum, Solana, and Cardano. This would mark a major shift in regulatory attitudes and provide new investment opportunities for both institutional and retail investors.
For now, the crypto industry awaits the SEC’s next move, as the outcome of WisdomTree’s application could play a key role in shaping the future of XRP as a legitimate, institutional-grade asset.