- The application was filed by the Cboe BZX Exchange
- ETF’s goal is to track the performance of XRP, which is measured by the CME CF Ripple-Dollar Reference Rate
- The SEC now has up to 240 days to approve or reject the application
The US Securities and Exchange Commission (SEC) has officially initiated a review of the WisdomTree XRP Trust, a proposed spot ETF designed to provide investors with exposure to XRP without the need to hold the cryptocurrency directly.
The Cboe BZX Exchange filed the application, and if it gets a green light, it would mark a notable achievement as the first spot XRP ETF in the US.
ETF’s goal is to track the performance of XRP, which is measured by the CME CF Ripple-Dollar Reference Rate.
The Trust’s assets will consist solely of XRP, cash, and cash equivalents, and it will value its shares daily at 4:00 PM ET using the same methodology as the Pricing Benchmark. In the context of cryptocurrencies, it refers to a reliable and transparent price data source used to measure the performance and value of digital assets.
Regarding the shares, they will be sold or redeemed in blocks of 5,000 through cash transactions with authorized participants.
The review is just a first step, though, and it doesn’t necessarily mean it will be approved. To do so, the SEC has up to 240 days to approve or reject the application. In the meantime, the SEC is soliciting public comments on whether the ETF’s design adequately addresses concerns related to market manipulation and investor protection.
XRP’s market activity
XRP had a lot of developments in the last few months, from an announcement that the cryptocurrency will be a part of the US strategic crypto reserve, to the market activity and whale accumulation. For instance, at one point in March, it had over 2 million transactions recorded in a single day, with whales having accumulated approximately 1.34 billion XRP, valued at around $3.26 billion.
Then, the SEC dropped its appeal in the long-standing lawsuit against Ripple Labs, which was seen as a big victory for the crypto industry.
Now, the outcome of the WisdomTree XRP Trust review could impact XRP’s institutional adoption and market dynamics in a huge way.
If approved, it would provide a regulated avenue for investors to gain exposure to XRP and may even set a precedent for the future of cryptocurrency-based investment products in the United States.
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