Canary Capital Files for Spot XRP ETF with SEC, Deepening The Race After Bitwise

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The race for an XRP exchange-traded fund (ETF) has deepened as crypto investment firm Canary Capital applied with the US SEC.

This move comes after Bitwise submitted its S-1 registration form to list an XRP ETF last week. Canary Capital observed encouraging signs of a favorable regulatory environment that will drive investors’ demand.

Canary Capital Files for Spot XRP ETF

The crypto investment company Canary Capital filed with the US Securities and Exchange Commission (SEC) for a spot XRP ETF. 

The new development marks Canary as the second potential issuer seeking to offer an XRP ETF to its customers. Its application comes after Bitwise submitted its S-1 application for XRP exchange-traded fund with the SEC on October 2.

According to its filing, Canary Capital indicated that its ETF will provide its clients access to Ripple’s native token market via a traditional brokerage account. The company also noted that the product eliminates risks and limitations associated with direct purchasing and holding the token.

Further, the investment firm disclosed that its exchange-traded fund will track XRP’s price utilizing the Chicago Mercantile Exchange (CME) CF Ripple index, a real-time price benchmark product.

Again, Canary Capital plans to ensure its ETF will not depend on other derivative products while tracking XRP’s value. The firm noted that such moves could expose its ETF to additional counterparty and credit risks.

A part of the filing stated: “The Trust will enable certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies that use XRP by investing in the Shares rather than purchasing, holding, and trading XRP directly.”

Meanwhile, Canary Capital has yet to indicate the ticker for the exchange-traded fund or its potential custodian. 

Steven McClurg, founder of Canary Capital, reacted to the new development. He noted that the company’s move to an XRP ETF came after observing encouraging signs of a progressive crypto regulatory environment. 

The founder noted increased investors’ interest in sophisticated access to crypto assets as the inspiration behind the move. He also said demand goes beyond Bitcoin and Ethereum-related products as more people seek alternatives like Ripple’s native token. 

Will This Product Emerge In The US?

The race for spot XRP ETF has sparked several reactions within the crypto space. 

Some believe a spot XRP ETF won’t emerge due to the SEC’s legal battle with Ripple. Though the judge declared it a non-security and even fined Ripple $125 million in civil penalties, the SEC is still contesting the decision.

The securities regulator appealed the judgment in the US Second Circuit Court of Appeals in Manhattan.

However, despite the pessimism, some top crypto personalities think XRP ETF will get approval. The President of ETF Store, Nate Geraci, maintained that ETF approval is now a matter of when not if.

Another XRP ETF filing…

Approval a matter of when, not if IMO.

But that “when” will be *much* further out in the future unless there’s a change in administration. https://t.co/jMW4NUjhBH

— Nate Geraci (@NateGeraci) October 8, 2024

However, he believes the approval will continue until an administration changes.