Canary Capital Follows Bitwise and Files for Spot XRP ETF despite SEC Appeal

As a seasoned researcher with over a decade of experience in the financial industry, I’ve seen my fair share of market developments and regulatory changes. The recent filing by Canary Capital for an XRP exchange-traded fund (ETF) is indeed intriguing, especially considering the ongoing Ripple lawsuit with the US Securities and Exchange Commission (SEC).


Following a week after the US Securities and Exchange Commission decided to appeal the $125 million penalty in the Ripple lawsuit, Canary Capital has made a move to introduce a spot XRP exchange-traded fund (ETF). This makes Canary Capital the second issuer within the past seven days, following Bitwise, to file for an XRP ETF.

On October 8, as reported in its submission to the US Securities and Exchange Commission, Canary Capital outlined that their exchange-traded fund will offer investors an opportunity to invest in XRP using a conventional brokerage account. This method eliminates potential obstacles or risks associated with directly purchasing and holding XRP.

In essence, this Canary XRP ETF follows the price fluctuations of XRP by employing the Chicago Mercantile Exchange (CME) CF Ripple index. Notably, it steers clear from utilizing derivative products to mirror the value of XRP, thus introducing extra counterparty and credit risks that may be associated with such financial instruments. The current XRP price is $0.53, and its 24-hour volatility remains at 0.0%. The market cap stands at an impressive $29.99 billion, while the volume within a 24-hour period amounts to $946.54 million.

Canary Capital has yet to disclose a few details such as the ticker for the XRP ETF fund as well as the custodian they would work with. Speaking to Fox Business, a spokesperson at Canary Capital said:

There’s a positive trend emerging in the regulatory landscape, becoming increasingly favorable towards advancement. Additionally, there’s an escalating interest among investors for more complex investment opportunities in cryptocurrencies beyond Bitcoin and Ethereum. This includes a focus on enterprise-level blockchain solutions and their associated tokens, like XRP, which are considered high-quality offerings.

Ripple Lawsuit: A Major Barrier to XRP ETF

In response to the court’s decision imposing a $125 million penalty on Ripple in the ongoing XRP lawsuit, the U.S. Securities and Exchange Commission (SEC) has opted to challenge this ruling. The SEC had initially sought a penalty of $2 billion from Ripple before the court’s decision.

Regarding recent updates, Nate Geraci, the President of ETF Store, expressed his belief that the approval of an XRP ETF is more a question of ‘when’, rather than ‘if’. In simpler terms, he suggested that the approval of an XRP Exchange-Traded Fund is imminent.

“There seems to be another application for an XRP ETF coming up. In my opinion, approval is inevitable rather than uncertain. However, it might take quite some time before we see that happen unless there’s a shift in the current administration.

The ongoing appeal is prolonging the legal proceedings, causing little fluctuation in the XRP‘s value. Consequently, even though applications for Bitwise XRP ETF and Canary XRP ETF have been submitted, the price of XRP remains relatively stable at around $0.532, with a market capitalization of approximately $30 billion.

Nonetheless, with XRP being hoarded by large investors, certain market experts foresee a 10-fold increase in its price. Meanwhile, there’s growing speculation about an XRP Exchange-Traded Fund (ETF). It will be intriguing to observe if there’s sufficient demand for such a product. So far, Ethereum ETFs introduced recently have underperformed due to insufficient retail and institutional involvement within the first two months of their launch.

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2024-10-09 11:57