Key Takeaways
- The US SEC has extended decisions regarding several ETF applications, including two involving XRP.
- The regulatory agency said it would extend the review period for Grayscale’s XRP ETF until mid-October.
- The postponement highlights the cautionary attitude the SEC is taking to redeem its face from within the crypto community.
The US Securities and Exchange Commission (SEC) has announced delaying a decision on a spot XRP ETF application filed by Grayscale, among several other such proposals.
According to an official statement filed by the SEC, the agency required a longer time to evaluate the XRP ETF proposal.
In its official communication, the SEC acknowledged receiving the application in January and acknowledged in mid-February that the maximum 45-day review period had begun. The agency, though, has the leeway to extend the process for up to 240 days from the date the application is published in the Federal Register.
Sufficient Time to Consider the Issues Raised
The next deadline would have fallen on May 21 and could be extended to mid-October. SEC Assistant Secretary Sherry Haywood wrote:
“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change, as modified by Amendment No. 1 so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
She further stated:
“Accordingly, the Commission, under Section 19(b)(2) of the Act, designates May 21, 2025, as the date by which the Commission shall either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change.”
The XRP ETF filings represent a wider flurry of such proposals filed by leading players within the crypto industry to try to satisfy a growing demand for crypto-based investment products packaged like traditional financial products. The initiative to try altcoin ETFs comes hot on the heels of the historic listing of spot Bitcoin ETFs in January 2024. Crypto ETFs have become the fastest-growing category of ETF products, with data showing they now manage at least $100 billion in assets.
Trump’s Victory was Boon for XRP
In 2024, Ripple Labs CEO Brad Garlinghouse said approving an XRP ETF in the United States was inevitable, citing retail and corporate investors’ growing demand for similar products. According to CoinGecko, following the said applications, the price of XRP surged nearly 9% to trade at $2.19. The current price may be lower than the all-time high of $3.38 that happened immediately following Donald Trump’s election victory alongside other assets like Bitcoin and Ethereum.
According to leading cryptocurrency experts, the Trump election victory, which was a boon for most digital assets, also affected XRP. The token’s value suffered considerable damage following the long-drawn legal issue challenging Ripple Labs over XRP sales. While the SEC has yet to abandon the case against Ripple Labs, there’s great speculation considering that the agency has abandoned similar high-profile actions against Kraken and Coinbase.
Conclusion
The SEC’s decision regarding the XRP ETF application could determine the entire trajectory of the altcoin market and eventually determine the price direction of the token. Moreover, allowing XRP ETFs could enhance institutional investors’ positive sentiments toward alternative digital assets. The postponement highlights the cautionary attitude of a regulator striving to redeem its face within the crypto community.
Frequently Asked Questions (FAQs)
What is Ripple?
Ripple is a payments company that specializes in cross-border remittance, leveraging blockchain technology. The firm uses the RippleNet network for payment transfers and is open to financial institutions worldwide.
What is XRP?
XRP is the native token of the decentralized blockchain XRP Ledger. Ripple Labs uses it to facilitate transactions on the XRP Ledger, helping financial institutions transfer value across borders.
What is XRP ETF?
In the crypto space, ETF stands for exchange-traded fund, which is a fund that invests in cryptocurrencies, especially Bitcoin and Ethereum. ETFs allow investors to gain cryptocurrency exposure without directly owning the digital assets. XRP ETFs aim to track the spot price of XRP in the traditional stock markets, where the product’s daily performance would inversely correspond to the return of the XRP price.
