Canary Capital has filed to establish an exchange-traded fund (ETF) for the cryptocurrency XRP, becoming the second entity this week to show interest in launching such a product.
Details of Canary Capital's Filing
In their October 8 filing with the U.S. Securities and Exchange Commission (SEC), Canary Capital stated that their ETF would allow investors access to the XRP market via a traditional brokerage account, avoiding possible barriers or risks linked to directly acquiring and holding XRP.
Advantages and Limitations of XRP ETF
The Canary Capital fund will track XRP’s price using the CME CF Ripple index, offering a real-time price benchmark. It will avoid using derivative products to minimize additional counterparty and credit risks.
Competition and Approval Prospects
Canary Capital's filing for an XRP ETF follows a similar application by crypto asset manager Bitwise filed with the SEC a week earlier. Nonetheless, hurdles remain due to ongoing SEC lawsuits concerning XRP's classification.
The filings by Canary Capital and Bitwise for the creation of the first-ever XRP exchange-traded fund mark a new chapter in investment opportunities for the cryptocurrency. Challenges, however, may arise from existing legal disputes over XRP’s classification.
