Bitwise has filed an application with the United States Securities and Exchange Commission (SEC) for the first spot XRP exchange-traded fund (ETF), according to an Oct. 2 statement .

The proposed exchange-traded fund (ETF) intends to directly hold XRP. It is currently awaiting the approval of its registration statement and the green light from the relevant regulatory authority.

Bitwise’s XRP ETF would leverage the firm’s existing expertise in managing crypto-focused funds, including spot Bitcoin and Ethereum ETFs launched earlier this year.

Why XRP ETF?

Bitwise selected XRP due to its potential to streamline international payments and its robust ecosystem. The firm highlighted that the XRP Ledger (XRPL) supports institutional involvement in decentralized finance (DeFi) and offers compatibility with the Ethereum Virtual Machine (EVM).

The company also drew attention to XRP’s sizable active user base and its position as one of the world’s leading cryptocurrencies.

Bitwise CEO Hunter Horsley emphasized the firm’s belief that blockchain technology will lead to the creation of new, politically neutral monetary assets and permissionless applications for the 21st century. He further stated:

“For the past seven years, we have assisted investors in capitalizing on opportunities within the space, and we are thrilled to continue this work with our filing for a Bitwise XRP ETP.”

Ripple CEO Brad Garlinghouse also weighed in, stating that the application signals the growing confidence of traditional financial institutions in XRP. He stated:

“This move reflects the increasing confidence & integration of digital assets like XRP into traditional finance, signaling the continued adoption and development of the cryptocurrency market. I believe this is just the beginning.”

Importantly, this news follows closely after Grayscale Investments launched a new XRP-focused crypto investment trust.

Will it be approved?

Market analysts have expressed reservations about the likelihood of the XRP ETF’s approval within the current US regulatory landscape.

Furthermore, Ripple’s ongoing legal dispute with the SEC further complicates the approval process. Galaxy Digital’s Head of Research Alex Thorn remarked :

“The SEC has until next week (Oct. 7) to challenge Judge Torres’ July 2023 ruling (which determined that secondary sales of XRP through exchanges were not securities). If they appeal, the chances of this ETF application being successful become almost nonexistent (I’ll be very surprised if they don’t appeal).”