Bitwise Asset Management, a company that manages an exchange-traded cryptocurrency index fund for individuals, investment managers, and institutions, announced on the filing of an initial registration statement with the US Securities and Exchange Commission (SEC) to launch the XRP ETP. According to the filing, the new fund will directly own XRP assets.
“We believe that in the 21st century, blockchains will bring new apolitical monetary assets and allow applications to be created without the need for permissions,” said Bitwise CEO Hunter Horsley.
In the text of the applications It is said that Bank of New York Mellon will act as the fund’s administrator, and Coinbase Custody will keep the Bitwise XRP ETF fund.
However, Galaxy Digital’s head of research Alex Thorne believesThe SEC has said that the chances of success are almost zero. The SEC has until October 7 to file an appeal against a July 2023 judge’s ruling that secondary sales of XRP through exchanges are not securities.
Earlier this year, Bitwise launched spot ETPs for Bitcoin and Ethereum, and in August 2024, it acquired ETC Group, a leading crypto ETP issuer in Europe.
What is XRP?
The XRP cryptocurrency operates on the XRP Ledger (XRPL) blockchain, which is most often used for international payments and money transfers. In addition, XRPL supports the participation of institutions in decentralized finance (DeFi), tokenization of real assets, and interaction with the Ethereum Virtual Machine (EVM).
XRP ranks 7th among the largest crypto assets with a market capitalization of $30 billion and more than 5 million active wallets.
Interestingly, the price of XRP, oddly enough, did not react positively to the application from Bitwise and even slipped down (as well as the market capitalization). But the trading volume has grown.
A little bit about ETPs and ETFs
ETP (Exchange-Traded Product) is a general term that covers all types of financial products that are traded on exchanges, just like common stocks. ETPs can include various types of investment products, such as exchange-traded funds (ETFs), exchange-traded bonds (ETNs), and commodity assets (ETCs).
An ETF is a fund that tracks a specific index, commodity, bond, or basket of assets and is traded on a stock exchange like a common stock. An ETF has an investment portfolio and is usually aimed at long-term investment.
An ETF share (unit) is a registered security that confirms the holder’s indirect right to a corresponding part of the fund’s assets. Buying a share in an ETF gives an investor the opportunity to invest, for example, in all the securities included in the index on which a particular fund is based.
In this case, the XRP ETF will give investors the opportunity to follow the price movement of this cryptocurrency without having it in their hands. Instead of dealing with cryptocurrency exchanges and wallets on their own, investors can buy XRP ETF shares through regular brokerage accounts.
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