Crypto investment firm Canary Capital Group officially submits its first XRP exchange-traded fund to the United States Securities and Exchange Commission.
This filing is coming exactly a week since Bitwise filed a similar product for the first XRP ETF, so far showcasing growing attempts to offer the exposure of Ripple’s XRP token to more traditional financial instruments.
First Canary Capital’s XRP ETF Submission
The Canary Spot XRP ETF will be the firm’s first product in the space of ETFs and will be focused on exposing investors to the token of XRP directly. The Fund will try to track the value of XRP, after deducting the amount for operational costs and other liabilities. Investors will be able to buy into the token without a lot of the usual challenges that come with acquiring digital assets-anything from setting up digital wallets to navigating cryptocurrency exchanges.
Steven McClurg, founder of Canary Capital, and former co-founder of Valkyrie Funds believes the timing was ripe for the filing. He cited a “more progressive regulatory environment” along with growing demand from institutional investors as reasons the application was filed.
Tracking XRP with CME CF Ripple Index
One of the main ingredients of the contemplated ETF is an investment in the Chicago Mercantile Exchange, or CME, CF Ripple index for tracking the price and performance of XRP. It is one of the indices that have been widely recognized for their accuracy and reliability, hence offering investors a secure way of monitoring the token’s value.
This filing represents the wider trend in the cryptocurrency market, where major digital assets trackers-ETFs of Bitcoin and Ethereum have already received significant traction. This year to date, nearly $19 billion has been invested into spot Bitcoin ETFs, while Ethereum-tracking ETFs see upwards of $550 million in market action.
Lawsuit Ripple Vs. SEC: Market Impact
The filing by Canary Capital comes at a time when there is significantly better clarity on XRP from a legal perspective. In July this year, a landmark ruling in the Ripple Labs vs. SEC lawsuit decided that XRP was not a security per se. The ruling had an immediate positive impact on the price of XRP and emboldened investor confidence in the token’s future.
Though Ripple Labs had to pay a US$125 million civil penalty for past violations of securities laws, the ruling removed some of the uncertainty that had always hung over XRP’s regulatory status. Some analysts commented that the XRP fundamentals remain intact, while interest from institutions in the token continues to rise even with regulatory appeals pending.
