On Friday, crypto asset manager 21Shares filed an S-1 registration form for a spot XRP ETF with the U.S. Securities and Exchange Commission (SEC) to establish the 21Shares Core XRP Trust.
This declaration follows similar applications from other companies, including Canary Capital and Bitwise in recent months, as interest in crypto ETFs increases, especially after the successful approvals for Bitcoin and Ethereum ETFs earlier this year.
21 Shares Files for XRP ETF Amid Strong Demand
The submit indicates strong demand for alternative crypto investments, especially as Bitcoin and Ethereum ETFs gain popularity among investors. However, the path to approval for the XRP ETF is fraught with uncertainty.
The SEC has been keeping a close eye on the crypto space, especially regarding the ongoing legal battle with Ripple Labs, which has significant implications for XRP’s classification.
The SEC has argued that XRP should be considered a security under the Howey Test, a legal framework used to determine whether certain transactions qualify as investment contracts.
This regulatory uncertainty poses significant challenges to the asset managers’ approval of the three XRP ETF applications currently under review.
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While there is optimism among some industry leaders, including Brad Garlinghouse, CEO of Ripple Labs, who had recently declared that the launch of an XRP ETF in the US is “inevitable,” it remains to be seen how the SEC will respond to these new applications.
An additional layer of complexity is the upcoming US presidential election. Both candidates, Donald Trump and Kamala Harris, have signaled their intention to reform the current regulatory stance on cryptocurrencies, which could lead to greater clarity and potentially more favorable terms for future crypto assets.
Such changes, if actually completed, could pave the way for the approval of the new XRP ETF applications, as well as other recently filed forms, including those for Solana and Litecoin.
At the time of writing, XRP was trading at $0.52, up more than 2% after the new filing announcement.
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