The U.S. Securities and Exchange Commission (SEC) has formally acknowledged a filing from Bitwise for a spot XRP Exchange-Traded Fund (ETF), marking the beginning of a regulatory review period that could last up to 90 days. Submitted by the Cboe BZX Exchange on February 6, 2025, the proposal seeks to list the Bitwise XRP ETF as a Commodity-Based Trust Share, offering a new way for investors to gain exposure to XRP without directly holding the asset.
Understanding the Proposed Bitwise XRP ETF
The proposed ETF is designed to provide both institutional and retail investors with regulated access to XRP, eliminating the need for self-custodied wallets. By trading on a regulated exchange, investors can benefit from transparent pricing and straightforward market entry. This structure aligns with the growing demand for secure and compliant crypto investment products.
XRP serves as a digital asset focused on facilitating fast, low-cost international money transfers. Bitwise argues that XRP’s market characteristics are comparable to those of Bitcoin and Ethereum, both of which now have approved spot ETFs. The filing also references the legal clarity established in the SEC vs. Ripple Labs case, which determined that programmatic sales of XRP do not constitute securities transactions.
Increased competition among ETF providers is expected to drive down fees, ultimately benefiting investors. The Bitwise XRP ETF aims to offer a cost-effective entry point into the digital assets market.
The Expanding Landscape of XRP ETFs
Bitwise is not the only firm seeking to launch an XRP ETF. The SEC has also acknowledged filings from 21Shares and Grayscale, while applications from Canary Capital and WisdomTree remain under review. This surge of interest reflects growing institutional confidence in XRP and the broader cryptocurrency ETF market.
Regulatory attitudes toward crypto ETFs have evolved significantly in recent years. Under the leadership of Commissioner Hester Peirce, the SEC’s crypto task force is actively reviewing digital asset regulations, creating a more supportive environment for ETF approvals.
According to Bloomberg ETF analysts James Seyffart and Eric Balchunas, the probability of an XRP ETF approval currently stands at around 65%. This optimism is fueled by the successful approvals of Bitcoin and Ethereum spot ETFs, which set important precedents.
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An approved Bitwise XRP ETF would become the third major cryptocurrency ETF available to U.S. investors, further legitimizing XRP as a mainstream investment asset.
Regulatory Review and Decision Timeline
The SEC’s acknowledgment of Bitwise’s filing triggers a structured review process. The agency will open a 21-day public comment period once the notice is published in the Federal Register. Feedback from the public will play a critical role in determining whether the ETF meets regulatory standards.
The SEC has several options at the end of the review period: approval, denial, or an extension for further evaluation. This process mirrors the one used for Bitcoin and Ethereum ETFs, providing a familiar framework for market participants.
The ultimate decision will significantly impact XRP’s role in the U.S. financial market. Approval could lead to broader adoption of XRP and reinforce its status alongside Bitcoin and Ethereum as key assets in the ETF space.
Frequently Asked Questions
What is an XRP ETF?
An XRP ETF is an exchange-traded fund that tracks the price of XRP. It allows investors to gain exposure to XRP without buying or storing the cryptocurrency directly. These funds are traded on traditional stock exchanges, providing a regulated and accessible investment vehicle.
How does the SEC’s approval process work?
The SEC reviews ETF applications through a structured process that includes a public comment period and detailed evaluation of regulatory compliance. The agency assesses market manipulation risks, custody solutions, and investor protection measures before making a decision.
What are the chances of the Bitwise XRP ETF being approved?
Analysts currently estimate a 65% probability of approval. This optimism is based on recent approvals of Bitcoin and Ethereum ETFs and evolving regulatory attitudes toward digital assets.
How would an XRP ETF benefit investors?
An XRP ETF would offer a safer, more convenient way to invest in XRP through regulated exchanges. It could also lower entry barriers, reduce fees, and improve market liquidity.
Is XRP considered a security?
The SEC vs. Ripple Labs case established that programmatic sales of XRP do not qualify as securities transactions. This ruling provides crucial legal clarity for ETF applicants.
When can we expect a final decision?
The review process may take up to 90 days, though the SEC can extend this timeline. A decision is likely by mid-2025, depending on the complexity of the application and public feedback.
Conclusion
The SEC’s acknowledgment of Bitwise’s XRP ETF filing is a significant step toward potentially approving the third major cryptocurrency ETF in the United States. For investors, this represents an opportunity to access XRP through a regulated and familiar investment structure. While regulatory hurdles remain, the growing interest from multiple asset managers and shifting regulatory perspectives suggest a promising future for XRP ETFs.
As the review process unfolds, market participants will be watching closely for updates and insights from the SEC. The decision could mark a turning point for XRP’s adoption and integration into traditional financial markets.