It seems like the race to launch an XRP ETF is getting serious, with 21Shares throwing its hat in the ring. They just filed with the SEC, and if you read the fine print, they’re making it crystal clear that they don’t think XRP is a security. This could be a game changer—or a total gamble. Let’s break it down.
Financial Firms Making Strategic Moves
If this thing gets approved, it’ll be listed on the Cboe BZX Exchange. That means regular folks might find it easier to get their hands on XRP through what they think is a safer and more regulated avenue. You know how it goes—get enough mainstream interest and suddenly everyone’s talking about it. 21Shares is already well-known for its crypto products in Europe, but this would really expand their footprint in the U.S.
Here’s where things get interesting: apparently, this proposed ETF will track something called the CME CF Ripple-Dollar Real-Time Index (XRPUSD_RTI). Never heard of that? Me neither until now. But according to them, this index gives real-time pricing for XRP against the dollar. So essentially, they’re saying “trust us; we’ve got an index.” It’s all very crypto-ception.
Are ETFs Really The Way To Go?
Now let’s talk cost because that’s usually a big sticking point when people decide whether to go with an investment vehicle or just buy the asset outright. 21Shares claims their ETF will be cheaper than directly buying and holding XRP—which I find hard to believe given that most ETFs come with some pretty hefty fees.
Bankrate seems to think so too; they say ETFs can be cost-effective as long as you factor in how much those expense ratios are compared to trading costs on exchanges. But here’s my issue: those expense ratios are ongoing costs that eat into your returns over time if you’re not careful.
The Motley Fool isn’t pulling any punches either; they flat-out say buying crypto directly is usually cheaper than going through an ETF middleman who takes a cut of your profits.
The Legal Quagmire
Now let’s pivot back to why this might all blow up in our faces: the SEC is still in litigation with Ripple Labs claiming XRP is an unregistered security. And get this—the SEC has until October 2024 to appeal! If they do and win? Kiss that ETF goodbye because then it’ll basically have been dead on arrival.
Bitwise Crypto Fund Manager made their own filing recently claiming exactly what 21Shares did—that XRP isn’t subject to U.S. federal securities laws—but good luck with that considering how cozy the SEC seems with them at present.
So here we are folks: we could be looking at either regulatory acceptance or another black mark against cryptocurrencies depending on how things shake out
Final Thoughts
In conclusion, while launching an XRP ETF may seem like a smart move amidst all this chaos, one has to wonder if it's just pouring gasoline onto an already raging fire of uncertainty surrounding digital assets’ legitimacy in traditional finance circles.
And let’s not forget—it was only last week when Grayscale got its Bitcoin spot fund approved which included several altcoins such as Avalanche (AVAX) amongst others! Could we possibly see similar outcomes for these newer filings down road? Only time will tell…
