Asset management company 21Shares has joined the list of companies that have filed applications with the US Securities and Exchange Commission (SEC) for a spot XRP exchange-traded fund (ETF).
On November 1, 21Shares filed a Form S-1 to register its Core XRP Trust shares for listing on the Cboe BZX Exchange. Coinbase, the largest cryptocurrency exchange in the US, would serve as the fund’s custodian.
Earlier this year, 21Shares successfully launched spot Bitcoin and Ethereum ETFs after SEC approval, including the Bitcoin ETF (ARKB), developed in partnership with Ark Invest. ARKB has since attracted $2.6 billion in net inflows, while its Ethereum ETF (CETH) has gained $21.8 million.
Core XRP Trust
The Core XRP Trust functions as a passive investment vehicle. The goal is to track the price of XRP without trying to generate additional returns by buying or selling XRP based on market trends. The Trust will not use leverage, derivatives or similar strategies over its assets.
Instead, it aims to mirror the performance of the CME CF Ripple-Dollar Reference Rate, after taking into account fees and other liabilities. CF Benchmarks Ltd. calculates this benchmark.
21Shares also clarified that the Trust does not offer direct exposure to XRP. Rather than a direct investment in XRP, the Trust provides investors with indirect access to the XRP spot market.
XRP ETF
Meanwhile, the chances of approving an XRP ETF are slim as the SEC has not yet approved any spot XRP ETFs.
This uncertainty stems from the SEC’s ongoing legal battle with Ripple Labs, the company behind XRP. As of 2020, the financial regulator claimed that Ripple had raised $1.3 billion through unregistered XRP sales.
However, a 2023 ruling ruled that XRP was not a security when sold programmatically on exchanges, but the case remains on appeal.
Despite the legal hurdles, Ripple CEO Brad Garlinghouse recently expressed optimism that the SEC will eventually approve an XRP ETF, given the recent approvals for Bitcoin and Ethereum ETFs.
Other asset managers, including Canary Capital and Bitwise, are also seeking approval for their spot XRP ETFs, signaling strong institutional interest in expanding XRP investment options despite regulatory uncertainty.