XRP Soars 12% as SEC Acknowledges Grayscale ETF Filing for Review

On 14th February, Ripple XRP prices surged by over 12% to £2.17 ($2.73) after the US Securities and Exchange Commission (SEC) officially acknowledged Grayscale's 19b-4 filings to convert its existing XRP Trust into a spot XRP exchange-traded product (ETP) for listing on the NYSE Arca.

The XRP Trust is among the world's largest XRP investment funds, with £12.8 million ($16.1 million) in assets under management. Converting the XRP trust to an ETP would ensure enhanced liquidity and accessibility, which could drive investors' demand for XRP tokens.

What's Next For XRP ETF Applications?

XRP prices held steady, hovering around £2.03 ($2.55) since the SEC's announcement. Note that the SEC acknowledgement isn't an automatic approval or a guarantee that the regulator will approve an XRP exchange-traded fund (ETF) in the near term.

However, the acknowledgement is a big deal, given that the agency refused to entertain altcoin ETF applications under former Chair Gary Gensler. The SEC's refusal to discuss ETFs led to the withdrawal of several applications earlier, including the proposed Solana ETF.

After yesterday's decision, the ETF filing will be published in the Federal Register, and the public will have 21 days to submit comments and feedback. After this period, the SEC will evaluate the response and decide whether to approve, reject, or extend its review of the ETF application, which could stretch up to 240 days.

On the same day, soon after the XRP ETF was acknowledged, the SEC announced in a separate release that it had also officially acknowledged Grayscale's Dogecoin ETF filing. The announcement buoyed Dogecoin prices to £0.21.

Other institutions, such as Bitwise Invest, Canary Funds, and WisdomTree Funds, have also filed for XRP ETFs. However, the SEC has yet to formally acknowledge these applications.

How Will XRP ETF Work?

If approved, the XRP ETF will have the Coinbase Custody Trust Company serve as custodian, and BNY Mellon will oversee administrative operations.

The Grayscale XRP Trust tracks XRP prices via the CoinDesk XRP Price Index (XRX), calculated at 4:00 p.m. New York time every business day.

To minimise price manipulation risks, the trust will source XRP prices from "US-Compliant Trading Platforms" that meet regulatory standards, such as adherence to stringent anti-money laundering and know-your-customer requirements.

The 19b-4 filing also proposed a creation and redemption mechanism where authorised participants deal in cash rather than directly handling XRP to ensure a regulated path for institutional investors while maintaining a degree of operation security.

These massive developments in the cryptocurrency industry could be attributed to President Donald Trump's swift actions to establish a crypto task force and appoint pro-crypto officials to lead and steer the SEC towards mass crypto adoption.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.