Bitwise Files Application to Launch XRP-Based ETF - New Horizons for Cryptocurrency

The cryptocurrency world is buzzing again, and this time the spotlight is on Bitwise. The company has filed an application with the U.S. Securities and Exchange Commission (SEC) to register an exchange-traded fund (ETF) based on the XRP token from Ripple Labs. This event has caught the attention of investors and analysts alike, as such initiatives could fundamentally change the market.

What’s Behind This Application?
The filing states that the fund will be administered by Bank of New York Mellon, with Coinbase Custody acting as the custodian of the Bitwise XRP ETF's assets. This combination suggests a serious approach to asset management, undoubtedly increasing trust in the fund.

Spot ETFs imply the actual purchase of cryptocurrency to back the fund’s shares. The launch of such ETFs in the U.S. has already proven effective, serving as a catalyst for increased capital inflows and, consequently, for price rises in cryptocurrencies, particularly Bitcoin in 2024. This trend could potentially be mirrored for XRP if the fund is approved.

Goals and Risks
According to Bitwise, the primary objective of the fund is to provide investors with access to XRP, excluding operational expenses and other liabilities. However, the company also emphasizes in its filing that XRP is not a security, contradicting earlier claims by the SEC. This point is crucial, given that the legal battle between Ripple and the SEC has been ongoing since December 2020. Notably, in 2023, the court ruled that XRP is not a security when sold to retail investors, although the SEC is attempting to appeal this decision.

Market Anticipation
Ripple Labs CEO Brad Garlinghouse expressed a positive outlook on the creation of ETFs based on XRP earlier this year, but specific plans remain under wraps. Interestingly, at the time of Bitwise’s application, XRP’s price hardly reacted, dropping by 4% in the last 24 hours. As of the time of writing, the token is trading at $0.58. Investors may be awaiting clearer signals from the market.

It's worth recalling an incident from November 2023 when a false application supposedly from BlackRock for an XRP ETF caused a temporary spike in the token's price. However, once the information was debunked, the price reverted to previous levels.

This highlights the volatility of the crypto market and the importance of transparency in such initiatives. What lies ahead for XRP and Bitwise’s application is a question of time, but one thing is certain: we stand on the brink of potential changes that could impact the entire cryptocurrency market.