Key Notes
- MEMX is pursuing an XRP ETF under the same commodity trust structure as approved Bitcoin and Ethereum ETFs, potentially improving its chances for SEC approval.
- Unlike Grayscale, which seeks to convert its XRP Trust into an ETF, MEMX classifies the product as a “commodity trust,” similar to Bitcoin and Ethereum ETFs.
- Data from Polymarket suggests a 78% probability of XRP ETF approval in the near future.
The race for an exchange-traded fund (ETF) for Ripple’s XRP continues, despite the digital asset being embroiled in a legal battle with the United States Securities and Exchange Commission (SEC). On February 17, the Members Exchange (MEMX) filed with the Commission to list and trade the investment product on its stock exchange.
The filing comes shortly after the SEC formally acknowledged a similar proposal by Grayscale Investments to add an XRP ETF to its growing list of crypto-related funds. This development highlights the increasing interest from institutional players looking to capitalize on the XRP $2.66 24h volatility: 2.5% Market cap: $153.97 B Vol. 24h: $4.22 B market through regulated investment vehicles.
MEMX Files for XRP ETF with Similar Structure to Bitcoin ETF
Unlike Grayscale, which is seeking to convert its existing XRP Trust into an ETF, MEMX is looking to list the token as a “commodity trust,” placing the product in the same category as spot Bitcoin and Ethereum ETFs. This classification could improve its chances of approval, considering that the SEC has already greenlit ETFs under the same structure.
The battle for a spot XRP ETF gained traction last year after the SEC, under Chair Gary Gensler, approved the trading of both Bitcoin and Ethereum ETFs. This regulatory milestone allowed institutional investors to gain exposure to the crypto market without directly holding the underlying assets.
With Bitcoin and Ethereum already available as ETFs, asset issuers have been actively working to expand their offerings. Financial giants like Grayscale, 21Shares, WisdomTree, and Bitwise have all filed applications with the SEC to offer spot XRP ETFs, hoping to tap into a broader market.
Growing Interest in XRP ETFs
Last year, Cboe BZX Exchange submitted a regulatory filing with the SEC, seeking approval to list the four ETFs on its platform upon approval. Just this past Friday, the financial watchdog acknowledged the application, marking a crucial step in the regulatory review process.
Although it remains uncertain whether the SEC will approve an XRP ETF, its acknowledgment of multiple filings suggests a possible shift in its stance on crypto-related investment products. Some analysts speculate that under a new administration, the Commission may become more open to approving additional crypto ETFs beyond just Bitcoin and Ethereum.
According to a FOX Business journalist Eleanor Terrett, the previous administration showed little interest in approving crypto ETFs outside the two largest digital assets. This stance led many financial firms to withdraw their applications for Solana ETFs due to concerns over regulatory resistance.
Potential Shift Under the Trump Administration
With Donald Trump back in office, the crypto industry is anticipating potential regulatory changes, given his pro-crypto stance. His administration could usher in a more favorable environment for digital asset ETFs, possibly increasing the likelihood of an XRP ETF approval.
Recent data from Polymarket suggests that the chances of an XRP ETF being approved now stand at approximately 78%. While this is not a guarantee, it reflects growing optimism among investors and industry players that regulatory barriers could soon be lowered.
Meanwhile, as asset issuers rush to introduce new crypto ETFs, industry executives are also exploring ways to enhance the capabilities of existing Bitcoin and Ethereum ETFs.
On Friday, Coinspeaker reported that the SEC is evaluating whether to incorporate staking into Bitcoin and Ethereum ETFs. The regulator is considering two possible approaches: enabling a fraction of an ETF’s assets to be staked via validator service providers or utilizing liquid staking tokens (LSTs), which would allow investors to redeem their assets without the need to unstake.
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