The U.S. Securities and Exchange Commission has deferred Grayscale’s application for a spot XRP exchange-traded fund, indicating it requires additional time to review the proposal.
As per a notice released by the SEC on March 11, the new deadline is now set for May 21. However, a final ruling may not be reached until mid-October. The agency acknowledged the Grayscale XRP ETF application in February, following its initial submission in January.
This application marks the first acknowledgment of a Ripple (XRP) ETF proposal by the SEC. Other asset managers such as Canary Capital, WisdomTree, Bitwise, CoinShares, and 21Shares have also submitted applications, reflecting a growing institutional interest in XRP-related investment products.
Additionally, Franklin Templeton joined the competitive landscape by submitting an S-1 filing with the SEC on March 11 to create the Franklin XRP Trust. If approved, Coinbase Custody will serve as the custodian for the ETF, which is slated to trade on the Cboe BZX Exchange.
The uptick in ETF applications follows the successful establishment of spot Bitcoin ETFs, which collectively manage assets totaling $95 billion as of March 12, according to Coinglass data. Industry experts assert that the surge in ETF filings is part of a broader trend aimed at providing regulated alternatives for traditional digital asset investments.
Many experts view these ETFs as a crucial step toward enhancing market transparency and safeguarding investors. Despite this increase in applications, the SEC remains cautious. Historically, the agency has shown reluctance to approve crypto-based ETFs due to concerns over regulatory ambiguity and potential market manipulation.
Nonetheless, analysts Eric Balchunas and James Seyffart from Bloomberg have suggested that XRP ETFs have a 65-75% likelihood of receiving approval in 2025. Market sentiment also appears to be favorable; bettors on the cryptocurrency prediction platform Polymarket currently estimate the chances of approval at approximately 72%, indicating optimism for a positive outcome.
Investors are eagerly awaiting further developments, with many anticipating that a clearer regulatory landscape will facilitate new investment opportunities within the digital asset sector.