Spot XRP ETF: Approval Possible This Month?
Will the first spot XRP ETF launch this month? The U.S. Securities and Exchange Commission (SEC) is currently reviewing applications that could pave the way for such a product.
SEC Seeks Input on Grayscale & Bitwise XRP ETFs
The SEC has requested public comments on its review of the Trading Division’s approval of Grayscale’s Digital Large Cap (GDLC) Fund. XRP constitutes 5.99% of this fund's holdings, potentially making it the first spot XRP ETF.
Comments are also being sought for the Bitwise Crypto Index Fund, which includes XRP among its 10 assets. The SEC has set an August 22 deadline for these comments, suggesting a decision on fund approval could follow shortly thereafter.
Grayscale's XRP ETF Challenge
The Commission’s call for statements is related to its review of a proposed rule change allowing the New York Stock Exchange (NYSE) to list and trade shares of the GDLC Fund. This action is taken under the Commission Rule of Practice 431.
Stakeholders have until August 22 to submit statements supporting or opposing the approval order for Grayscale’s BTC, ETH, SOL, ADA, and XRP ETF, as approved by the Division of Trading and Markets on July 1. However, this approval is currently stayed pending further review.
Grayscale has challenged the SEC’s stay order, arguing it lacks the authority under Section 19b of the Exchange Act. Grayscale contends that the Act supersedes the Commission Rules of Practice, rendering the stay invalid.
According to Section 19b, the SEC must approve or deny the proposed rule change within 240 days. Grayscale argues that since the SEC failed to act within this timeframe, automatic approval should be granted.
Bitwise Multi-Asset Fund Under Review
The SEC is also soliciting comments on the Division’s approval order for the Bitwise 10 Crypto Index Fund (BITW). Since XRP is included in this fund, it's also classified as a potential XRP ETF.
XRP makes up 5.9% of BITW’s total holdings, which also include Bitcoin, Ethereum, Solana, Cardano, Sui, Chainlink, Avalanche, Litecoin, and Polkadot.
The SEC’s Trading Division had previously approved NYSE’s rule change to list BITW shares, but this approval was also stayed pending review. The SEC has confirmed that this stay remains in effect.
Bloomberg analyst James Seyffart suggests that clarity on these funds should emerge before the end of the month. Whether the SEC will approve these XRP ETFs post-August 22 remains to be seen.
Bloomberg analyst Eric Balchunas has predicted that the SEC could approve other spot funds holding only XRP by September or October.