Brazil has made history by approving the world’s first XRP spot ETF, marking a milestone for Ripple’s token and the wider crypto market. The decision by Brazil’s Securities and Exchange Commission (CVM) opens the door for institutional investors to gain exposure to XRP through traditional financial markets.
Reasons for Approval
Brazil’s CVM has officially approved the Hashdex NASDAQ XRP Index Fund, making it the first ETF to directly hold XRP. The ETF will trade on B3, Brazil’s main stock exchange, with Genial Investimentos as the fund administrator. While the official launch date is yet to be announced, Hashdex has confirmed the approval and will soon provide trading details. According to Silvio Pegado, managing director of Ripple in Latin America, XRP's strong utility, rising institutional demand, and its significant market capitalization made it a natural choice for an ETF.
Market Significance
1. Institutional Investors Can Now Buy XRP
The XRP spot ETF offers a regulated investment vehicle for institutional and retail investors. Instead of dealing with crypto exchanges and wallets, investors can gain exposure to XRP through a traditional stock exchange.
2. Brazil Leads While the U.S. Lags
Brazil has become a crypto-friendly nation, actively approving various digital asset ETFs. Meanwhile, the U.S. has yet to approve an XRP spot ETF despite multiple applications.
3. XRP’s Market Cap and Institutional Interest
XRP is currently the third-largest cryptocurrency, with a market cap of $155 billion. With a spot ETF, demand for XRP could increase substantially.
Could the U.S. Be Next?
The U.S. SEC has recently approved spot ETFs for Bitcoin and Ethereum, potentially indicating a shift in its approach to crypto assets. However, XRP remains a complex issue due to its legal history with the SEC. Additionally, the SEC has recently acknowledged a spot XRP ETF filing from Cboe BZX Exchange. Analysts from JP Morgan predict that if approved, such ETFs could attract up to $14 billion in the U.S. within their first year.
Brazil's approval of a spot XRP ETF opens new avenues for institutional investments and may boost interest in cryptocurrencies. While Brazil advances its crypto market, the U.S. continues to deliberate on its next steps.
