On February 14th, Ripple XRP experienced a notable surge, with prices climbing over 12% to £2.17 ($2.73) following the US Securities and Exchange Commission’s (SEC) official acknowledgment of Grayscale’s 19b-4 filings. This acknowledgment paves the way for the conversion of Grayscale’s existing XRP Trust into a spot XRP exchange-traded product (ETP) for potential listing on the NYSE Arca. The XRP Trust stands as one of the largest XRP investment funds globally, boasting £12.8 million ($16.1 million) in assets under management. The shift to an ETP structure aims to bolster liquidity and accessibility, potentially driving increased demand for XRP tokens.
### Ripple XRP’s Road to an ETF
In the wake of the SEC’s announcement, XRP prices have maintained stability, hovering around £2.03 ($2.55). It’s crucial to note that the SEC’s acknowledgment does not equate to immediate approval, nor does it guarantee the green light for an XRP exchange-traded fund (ETF) in the near future. However, this acknowledgment signifies a significant milestone, especially considering the agency’s previous hesitance under former Chair Gary Gensler to address altcoin ETF applications. The SEC’s reluctance to discuss ETFs led to the withdrawal of various applications in the past, including a proposed Solana ETF.
Following the acknowledgment, the ETF filing will undergo publication in the Federal Register. Subsequently, the public will have a 21-day window to submit comments and feedback. Following this period, the SEC will evaluate the responses and make a decision on whether to approve, reject, or extend its review of the ETF application, a process that could span up to 240 days.
On the same day as the XRP ETF acknowledgment, the SEC also officially recognized Grayscale’s Dogecoin ETF filing, leading to a surge in Dogecoin prices to £0.21. Additional institutions, such as Bitwise Invest, Canary Funds, and WisdomTree Funds, have submitted XRP ETF applications, although formal acknowledgments from the SEC are pending.
### The Mechanics Behind the XRP ETF
If approved, the XRP ETF will enlist the Coinbase Custody Trust Company as the custodian, with administrative operations overseen by BNY Mellon. The Grayscale XRP Trust will track XRP prices using the CoinDesk XRP Price Index (XRX), calculated daily at 4:00 p.m. New York time.
To mitigate price manipulation risks, the trust will source XRP prices from “US-Compliant Trading Platforms” that adhere to regulatory standards, including stringent anti-money laundering and know-your-customer requirements. The 19b-4 filing also outlines a creation and redemption mechanism wherein authorized participants transact in cash rather than directly handling XRP, ensuring a regulated avenue for institutional investors while maintaining operational security.
These significant advancements within the cryptocurrency sector can be attributed in part to President Donald Trump’s proactive efforts to establish a crypto task force and appoint pro-crypto officials to lead the SEC, signaling a potential shift towards broader crypto adoption.
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