Ripple CEO Brad Garlinghouse Discusses XRP ETF Possibility on ‘The Claman Countdown’
In a recent appearance on FOX Business’s "The Claman Countdown," Ripple CEO Brad Garlinghouse shared insights into the potential for an XRP exchange-traded fund (ETF). This discussion comes at a time when the cryptocurrency landscape is rapidly evolving, and regulatory scrutiny is intensifying. The conversation is particularly relevant given the recent developments surrounding Bitwise Asset Management’s submission of a registration statement to the Securities and Exchange Commission (SEC) for an XRP ETF.
Bitwise’s Bold Move: Filing for an XRP ETF
Bitwise, a prominent crypto asset manager with over $4.5 billion in assets under management, has taken a significant step by filing a Form S-1 registration statement with the SEC. This move marks Bitwise as the first firm to officially seek approval for a spot ETF that would track the daily price of XRP, currently the seventh largest cryptocurrency with a market capitalization exceeding $30 billion. The filing was made public on Wednesday morning, signaling Bitwise’s commitment to expanding its offerings in the crypto space.
This filing follows Bitwise’s recent successes with spot bitcoin and ethereum ETFs and its acquisition of ETC Group, a leading issuer of crypto exchange-traded products in Europe. The company’s CEO, Hunter Horsley, expressed enthusiasm about the potential for an XRP ETF, stating, "XRP is one of the most enduring, well-known assets in the space and is also recognized among mainstream investors."
Regulatory Hurdles Ahead
Despite the excitement surrounding the XRP ETF filing, the path to approval is fraught with challenges. The SEC has historically been cautious about approving cryptocurrency ETFs, particularly those involving assets with ambiguous regulatory statuses. Recent reports indicated that applications for Solana ETFs were rescinded due to the SEC’s concerns regarding Solana’s legal standing. This raises questions about whether the SEC will view XRP favorably, especially given the ongoing litigation between the SEC and Ripple.
The SEC’s scrutiny stems from its 2020 lawsuit against Ripple, alleging that the company failed to register XRP sales as unregistered securities offerings. A pivotal moment occurred last year when a judge ruled that only certain sales of XRP—specifically those to institutional investors—were considered securities. This ruling has left the regulatory status of XRP in a state of uncertainty, which could significantly impact the SEC’s decision regarding the approval of an XRP ETF.
The Competitive Landscape
In addition to Bitwise’s filing, another entity, Canary Capital, has also submitted a filing for an XRP ETF. Founded by Steven McClurg, a co-founder and former chief investment officer of Valkyrie Funds, Canary Capital’s filing adds another layer of competition in the race to launch an XRP ETF. While McClurg has not commented on the filing, the emergence of multiple players in this space indicates a growing interest in XRP as a viable investment vehicle.
The Timing of the Filing
The timing of Bitwise’s filing is crucial, as the SEC’s deadline to appeal the Ripple ruling is set for October 7. Should the SEC choose to appeal, the regulatory status of XRP could remain in limbo, complicating the approval process for an XRP ETF. This uncertainty is a significant factor that both Bitwise and other potential issuers must navigate as they seek to bring their products to market.
The Broader Context of Crypto ETFs
Despite the challenges posed by regulatory bodies, the success of bitcoin and ethereum ETFs cannot be overlooked. These products have attracted substantial investor interest, with inflows totaling $17 billion since January. This success highlights a growing acceptance of cryptocurrency ETFs among mainstream investors, which could bode well for the future of XRP ETFs if regulatory hurdles can be overcome.
As the cryptocurrency market continues to mature, the potential for an XRP ETF represents a significant opportunity for investors seeking exposure to one of the most recognized digital assets. The coming months will be critical in determining whether Bitwise and other firms can successfully navigate the regulatory landscape and bring XRP ETFs to market.