Bitwise Files for XRP ETF, Bets on Regulatory Clarity Post-Elections

Key Takeaways

• Bitwise had filed for a spot in XRP ETF. 
• ETF analysts believe the filing is a bet on the U.S. Presidential elections.
• Eric Balchunas believes any altcoin ETF is a bet on Trump’s win.

Bitwise is the latest asset manager to stake its claim in the emerging market for XRP investment products, filing for a spot XRP exchange-traded fund (ETF) on Sept. 30.

The filing coincides with the election season, sparking speculation that Bitwise is likely positioning itself for a regulatory landscape that could become more accommodating to the crypto industry.

Bitwise XRP ETF: Strategic Move or an Early Filing?

Bitwise filed its application with the Delaware Department of State’s Division of Corporations. The asset manager has listed CSC Delaware Trust Company as the registered agent.

Bitwise XRP ETF filing. Source: Division of Corporations — State of Delaware

The filing is a significant development for Ripple. However, given the ongoing lawsuit with the Securities and Exchange Commission (SEC), XRP ETF applications will likely face hurdles in gaining approval from the regulator.

Despite these challenges, ETF analysts view Bitwise’s filing as a strategic move, betting on the outcome of the U.S. Presidential elections.

Nate Geraci, an ETF investment advisor, believes the filing is essentially a “call option on November’s election,” indicating that the company is wagering on regulatory clarity post-elections.

While short-term regulatory challenges are likely, Geraci remains optimistic about the long-term prospects of an XRP ETF. “Politics plays a key role in the decision-making process in the short term, but I think this is all inevitable over time,” he said.

Bloomberg ETF analyst Eric Balchunas echoed a similar sentiment , suggesting that asset managers like Bitwise are testing the waters and betting on a Trump win, given his pro-crypto stance this election season.

If Vice President Kamala Harris wins, however, “there is no way these get approved, and the call expires worthless,” Balchunas said.

Bitwise did not respond to requests for comment at press time.

Will the SEC Approve More ETFs?

The SEC is notorious for its crackdown on crypto companies .

The regulator had previously cited concerns about market manipulation and the Bitcoin market being too small for an ETF. But when the market capitalization reached over $1 trillion in 2024, the agency approved nearly a dozen spot BTC ETFs in January.

This decision was followed by the unexpected approval of spot Ether ETFs in July.

The recent filings for a Solana ETF and an XRP ETF have sparked hope that the SEC may reconsider its approach. However, the approval of an XRP ETF may hinge on the outcome of the ongoing lawsuit between Ripple and the SEC over the classification of XRP as a security.

Regardless of the outcome, 2024 could be a pivotal year for XRP in the U.S. Despite regulatory hurdles, XRP seems poised to break out of its boundaries with an ETF filing and an investment trust coming in the same year.