TLDR
- The SEC’s delay in reviewing XRP ETF filings affects 90+ applications.
- Grayscale’s XRP Trust holds $16.1 billion in assets amid rising demand.
- Institutional demand suggests $1–2 billion in inflows post-XRP ETF launch.
- Global regulators like Canada and Singapore review XRP ETF proposals.
The U.S. Securities and Exchange Commission (SEC) has postponed its decision on multiple applications for exchange-traded funds (ETFs) based on XRP. These delays come as the government shutdown has caused a halt in the SEC’s review process. Despite the setbacks, rising institutional interest in XRP is driving demand for these ETFs, with some projections suggesting that approval could bring in billions in investments.
Grayscale’s XRP ETF Filing Faces Delay
Grayscale Investments is one of the companies pushing to convert its XRP Trust into an ETF, trading under the ticker “GXRP.” The firm filed with the SEC in late January 2024, aiming to offer U.S. investors direct exposure to XRP in a regulated structure. However, with the SEC’s ongoing review delays due to the government shutdown, Grayscale’s plans are currently stalled.
The proposed ETF would be managed with Coinbase Custody Trust serving as the custodian and BNY Mellon Asset Servicing handling administrative tasks. If approved, the fund would follow a similar path to Grayscale’s Bitcoin and Ethereum ETFs, which were converted to ETFs in 2024. However, the SEC’s slow pace in processing applications has put this move on hold, with no final decision expected until at least October 2025.
Government Shutdown Halts SEC’s Review of XRP ETF Applications
The current government shutdown has significantly impacted the SEC’s ability to review new ETF applications. Over 90 filings, including those for XRP-based ETFs, are affected. As the SEC operates with a limited staff, deadlines for final approval have been paused, and the regulatory body’s review of these proposals has been delayed indefinitely.
Several firms, including Bitwise, WisdomTree, and 21Shares, have submitted amended filings for their XRP ETF proposals. Analysts suggest these amendments indicate that approval may be imminent. However, with the ongoing government shutdown, many are uncertain when the SEC will finalize its decision. The delay has raised questions about how long the SEC will take to process the remaining ETF applications, especially with XRP’s growing institutional demand.
Rising Institutional Demand for XRP ETFs
Despite the regulatory challenges, institutional demand for XRP is growing. Grayscale’s XRP Trust currently holds over $16 billion in assets, a strong indication of the demand from institutional investors. In addition, firms like Canary Capital are also seeking to launch diversified crypto ETFs, with XRP included alongside other major U.S.-originated cryptocurrencies.
The potential for institutional inflows post-approval is substantial, with some experts estimating that XRP ETFs could see $1–2 billion in inflows once they are launched. This has added pressure on the SEC to act, as the demand for these products grows. In fact, some in the industry, including Ripple CEO Brad Garlinghouse, have suggested that approval could come before the end of 2025.
Global Regulatory Momentum for XRP ETFs
As the SEC continues its review of XRP ETF filings, global regulators are also making progress. Countries like Canada and Singapore are actively reviewing XRP ETF proposals, adding a layer of international pressure on U.S. regulators to make a decision. Global momentum towards crypto-friendly policies is growing, which could eventually influence the SEC’s stance on XRP ETFs.
The ongoing uncertainty surrounding XRP’s regulatory classification has caused some caution among U.S. regulators. However, with increasing demand from both retail and institutional investors, there are signs that the SEC may approve XRP ETFs in the near future. If approved, these ETFs could help stabilize XRP prices by providing institutional investors with a structured, regulated way to hold the asset.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
