As a seasoned researcher with over two decades of experience in the financial industry, I have seen my fair share of regulatory battles and market turbulence. The current situation surrounding Bitwise’s XRP ETF is indeed intriguing, and it seems that fate may be hanging in the balance.
Bitwise’s anticipation for its XRP ETF application to be accepted remains uncertain, with the outcome potentially hinging on the Securities and Exchange Commission’s response to a recent court decision regarding Ripple. This verdict concluded that XRP transactions on secondary markets to individual investors were not classified as securities. Nevertheless, if the regulatory body chooses to challenge this ruling, it is likely that Bitwise’s application will face obstacles, as stated by Alex Thorn, Head of Research at Galaxy Digital. He explained that in such a scenario, the approval of Bitwise’s bid may be less probable.
“The likelihood of this ETF filing succeeding drops to near zero if the SEC does appeal.”
Until October 7, 2024, the Securities and Exchange Commission (SEC) retains the option to file an appeal. Yet, the commission remains undecided about whether they will proceed with this appeal or not.
Notably, Bitwise has chosen to proceed with its proposed XRP ETF without awaiting the SEC’s decision. On September 30, they submitted an application to set up a trust entity, marking a substantial stride in their quest for ETF approval.
SEC May Yet Appeal
Earlier, Eleanor Terrett, a FOX Business journalist with past experience as an SEC lawyer, suggested that it’s likely the SEC will contest the court decision. She also indicated that many at the agency think the court made a mistake in this case, and they believe the law should not be interpreted this way.
Terrett’s views were recently confirmed by the regulator. The SEC officially stated in another filing, in a case against Terraform Labs, that the court “wrongly decided.” According to the regulator, the court may have created an unjust division between institutional and retail investors through its decision.
In essence, Ripple might be eagerly waiting for the Securities and Exchange Commission (SEC) to remain silent, implying a resolution in their ongoing legal dispute. This would occur once the company fulfills all payment obligations for fines and settlements.
Should the agency appeal, however, then this case may drag and extend deep into 2025.
More Doom for Bitwise’s XRP ETF?
While the outcome of an XRP ETF may depend on the Securities and Exchange Commission (SEC), Bloomberg ETF analyst Eric Balchunas has also pointed out another potential risk. In his view, the chances for XRP ETFs would be slim if Vice President Kamala Harris were to win the upcoming presidential election.
As a crypto investor, I must admit that my hopes for a favorable regulatory environment under the Harris administration are somewhat clouded. The details of how they intend to approach cryptocurrencies and regulate them are still unclear, making it challenging to predict the future landscape.
As a researcher, I can affirm that in various public statements, Harris has openly endorsed novel technologies, among which are digital currencies like cryptocurrency.
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2024-10-02 15:48