WisdomTree Funds Takes a Significant Step Towards XRP ETF
WisdomTree Funds, a prominent asset management firm headquartered in New York and registered in Delaware, has taken an important step by registering for an XRP exchange-traded fund (ETF) on November 25. This registration signifies the firm’s initial move towards filing with the U.S. Securities and Exchange Commission (SEC), paving the way for potential approval in the near future.
Joining the XRP ETF Competition
The newly proposed “WisdomTree XRP Fund” represents the firm’s entry into the increasing competition in the realm of XRP-focused ETFs. The announcement was confirmed by industry insiders, including Eleanor Terrett, who noted that WisdomTree has substantial experience in managing assets, boasting over $100 billion under its management, and marked this filing as legitimate.
With this move, WisdomTree aligns itself with early applicants for XRP ETFs, including Bitwise, Canary Capital, and 21Shares. However, it’s important to note that none of these applications have yet secured approval from the SEC.
Next Steps and Regulatory Challenges
Analysts suggest that WisdomTree will likely submit an S-1 registration statement to the SEC soon, following this initial filing. Despite this promising development, the road to establishing XRP as an ETF-backed asset remains fraught with legal and regulatory challenges. Ripple Labs, the entity responsible for XRP, is currently engaged in ongoing litigation with the SEC.
In a notable legal decision in July 2023, Ripple partially triumphed against the SEC, with a court ruling determining that XRP was not classified as a security in specific contexts. However, the SEC appealed this ruling in October 2024, and further legal proceedings have been postponed until January 2025.
Ripple CEO’s Optimism and Market Trends
Ripple CEO Brad Garlinghouse has expressed optimism regarding the increasing demand for cryptocurrency ETFs, highlighting that since the launch of Bitcoin ETFs earlier this year, billions have flowed into these investment vehicles. This trend underscores the growing institutional interest in crypto-backed funds and the potential market shift toward accepting such products.
Furthermore, the recent shifts in the U.S. political landscape, including the resignation of SEC Chair Gary Gensler following former President Donald Trump’s return to office, have sparked optimism for more favorable regulatory policies regarding cryptocurrencies.
Anticipating a Pro-Crypto Regulatory Environment
Industry analysts speculate that the upcoming SEC leadership may adopt a more crypto-friendly approach, which could facilitate the approval of XRP ETFs. Although the SEC has not yet sanctioned any XRP ETF applications, the increase in filings indicates a rising confidence among asset managers in the cryptocurrency market.
As the political landscape evolves, with conservative appointees expected to occupy critical financial regulatory roles, there are anticipations of a potential shift in policy oversight. Analysts believe that the new administration could prioritize pro-crypto strategies, which may include the expedited approval of cryptocurrency ETFs.
The Future of XRP ETFs in the U.S. Market
The outcome of Ripple’s ongoing legal battle will undoubtedly shape the SEC’s future stance toward XRP ETFs. Should Ripple achieve a favorable judgment and if regulatory atmospheres smooth under new leadership, it may usher in the era of the first XRP ETF in the U.S. market. As developments unfold, all eyes will be on the SEC and the changing political dynamics that may impact the approval of cryptocurrency-backed financial products.