Canary and Bitwise are seeking approval from the regulatory body, the SEC.
For a long time, XRP was classified as an unregistered security.
Two companies are in the race to launch an exchange-traded fund (ETF) based on the spot price of XRP, a cryptocurrency issued by Ripple Labs. Investment firm Canary Capital joined Bitwise in the effort to obtain Commission approval of Stock Exchange and Securities (SEC) for the launch of their respective products.
Canary recently announced that has taken steps to launch and negotiate an XRP spot ETF. In its SEC filing, the company highlighted that this ETF would allow investors to access XRP “through a traditional brokerage account without the potential barriers to entry or risks involved with directly acquiring and holding XRP.”
The Canary XRP ETF will track the price of XRP using the CF Ripple index of the Chicago Mercantile Exchange (CME), a real-time price reference productaccording to the official presentation.
This fund will avoid using derivative products to track the value of XRP which, according to Canary, could expose them to “additional counterparty and credit risks.” The firm also expressed its belief that the ETF design would allow certain investors to implement more effective and efficient asset allocation strategies using XRP, without needing to directly purchase, hold and trade the cryptocurrency.
However, Canary Capital has not revealed who would be the custodian of this ETF nor under what ticker the fund would trade, leaving some crucial details for the market in the air.
Two companies interested in XRP ETFs
With Canary’s announcement, there are now two firms that have expressed their intention to create and trade an XRP ETF. A little over a week ago, Bitwise Asset Management announced its own similar initiative, marking the growing interest in investment products linked to this cryptocurrency.
As reported by CriptoNoticias, the Bitwise XRP ETF entity was registered as a statutory trust in Delaware on Monday, September 30. That was a first formal step towards creating an XRP ETF, aligned with the previous strategies of Bitwise and other firms such as Blackrock and Fidelity, for bitcoin and ether (ETH) ETFs.
As for the market reaction, the XRP price showed a slight increase of 0.33% in the last 24 hours, standing at an average of 0.53 dollars per coin. This increase, although positive, reflects a moderate response to the ETF announcements, similar to what was observed with the Bitwise announcement.
The community of investors and cryptocurrency enthusiasts is watching these developments with interest, hoping for the approval of an XRP ETF. can increase the liquidity and accessibility of this cryptocurrencyexpanding its adoption in the traditional financial market.
This article was created using artificial intelligence and edited by a human Editor.