Two Big Developments in XRP ETFs Just Happened
It took years for exchange-traded funds tracking the spot price of Bitcoin and Ether to be approved. And despite a seismic shift in the U.S. Securities and Exchange Commission — with Gary Gensler out as Donald Trump takes office — the same is now true for ETFs focused on smaller cryptocurrencies like XRP.
Earlier this week, the SEC announced that it is delaying a decision on whether to allow the likes of Grayscale and Bitwise to launch Wall Street products focused on the world’s fourth-largest cryptocurrency. That kicks the can down the road to the end of May, meaning funds that allow investors to gain exposure to XRP’s price without owning it directly won’t be launching anytime soon.
Such a regulatory milestone is regarded as crucial for catalyzing institutional interest in this altcoin, with ETFs tracking BTC and ETH collectively commanding total net assets of about $99 billion at the time of writing.
So… is this delay something that should be giving the so-called “XRP Army” sleepless nights? Are we going to be in a position where the SEC perpetually postpones these applications until the end of time? No, says Bloomberg Intelligence analyst James Seyffart. He argues that all of this amounts to “standard procedure,” adding:
“This doesn’t change our (relatively high) odds of approval.”
The crypto-powered betting site Polymarket seems to agree with this perspective. At the time of writing, it says there’s a 35% chance of XRP ETFs being approved by July 31 — rising to 72% by the end of this year.
Let’s not forget that this is an industry renowned for its impatience. Trump has barely been in office for two months — but from the creation of a strategic Bitcoin reserve to a slew of friendlier regulations, enthusiasts have wanted the White House to move at lightning speed.
It’s also worth remembering a significant fact about the SEC: the president’s pick to replace Gensler as chairman, Paul Atkins, hasn’t actually been confirmed by Congress yet. Approving applications for XRP ETFs before he’s in office — along with those that plan to hold Solana, Litecoin and even Dogecoin — would be unusual.
OK, then. But when exactly is Atkins, who is on the record as being pro-crypto, going to have these confirmation hearings? Good question. A recent Semafor report revealed that the White House “still hasn’t produced the paperwork” to get dates booked into the Senate. That being said, past hearings for other SEC chairs also happened in March, so we’re not dealing with anything too out of the ordinary here.
More XRP ETF Filings Emerge
Undeterred by the delays seen by earlier applications, another big asset manager has just thrown its hat into the ring with an XRP ETF filing of its own: Franklin Templeton. The investment giant, which had a staggering $1.68 trillion in assets under management as of last August, formally submitted plans to create “The Franklin XRP Trust,” stating:
“The assets of the Fund consist primarily of XRP held by a custodian on behalf of the Fund. The Fund seeks to reflect generally the performance of the price of XRP. The Fund seeks to reflect such performance before payment of the Fund’s expenses.”
It is worth noting that Franklin Templeton does already offer exchange-traded funds following the spot price of Bitcoin and Ether — but they aren’t as popular as you might expect.
Among the 12 BTC ETFs operating in the U.S., BlackRock’s iShares Bitcoin Trust currently has a market share of 50.85%, while Fidelity is a distant second at 17.5%. Franklin’s EZBC is the 10th-most popular fund around, with a market share of just 0.46%.
It’s a similar story too among the nine ETH ETFs. BlackRock again dominates with a 35% chunk of net assets here, while Franklin Templeton’s EZET offering languishes behind on 0.33%.
Put another way, if and when this company’s XRP filing gets the green light, it might not set the crypto world on fire — and generally speaking, institutional demand will diminish as altcoins, given the ETF treatment, get smaller anyway.
Nonetheless, the SEC moving to allow XRP to feature in exchange-traded funds more generally could boost demand for this digital asset significantly — up to $8 billion in the first 12 months, JPMorgan predicts — and enable this altcoin to be included in ETFs tracking more than one cryptocurrency.