The SEC has deferred its ruling on Grayscale's proposal to convert its XRP Trust into a spot ETF, extending the review period until May 2025.
Deferred XRP ETF Decision and Its Impact
The SEC has postponed its resolution on Grayscale's proposal to convert its XRP Trust into an exchange-traded fund (ETF), extending the review period to May 21, 2025. Following the SEC's announcement, XRP experienced a brief decline, retreating by 1.2% to $2.2.
Other Cryptocurrency ETF Delays
In conjunction with the XRP ETF decision delay, the SEC has also postponed rulings on other cryptocurrency ETFs including Grayscale's Dogecoin ETF, Canary Capital's Litecoin ETF, and filings for a spot Solana ETF by Cboe BZX Exchange. These decisions have also been pushed to May 2025, reflecting the regulator's cautious approach towards introducing cryptocurrency investment vehicles into the U.S. financial markets. Grayscale's initial filing to transform its XRP Trust into an ETF in late January 2025 marked the first XRP ETF proposal acknowledged by the SEC in mid-February. This acknowledgment signified a significant milestone for XRP-based investment products. Industry analysts anticipate that the SEC may issue similar 45-day extensions for other pending XRP ETF applications from asset managers such as 21Shares and Canary Capital.
Growing Interest in XRP ETFs
Interest in XRP ETFs is intensifying, with investment giant Franklin Templeton filing a preliminary prospectus for a spot XRP ETF on March 11, 2025. If approved, this ETF would trade on the Cboe BZX Exchange, with Coinbase Custody serving as the custodian for the fund’s holdings. This move underscores the escalating interest among institutional investors in regulated XRP investment products. Despite regulatory delays, market sentiment regarding the approval of an XRP ETF remains optimistic. Bloomberg analysts Eric Balchunas and James Seyffart estimate a 65–75% probability of approval in 2025. Similarly, bettors on the cryptocurrency prediction platform Polymarket currently place the approval odds at approximately 72%, reflecting confidence in a favorable outcome. The SEC's cautious stance on cryptocurrency ETFs highlights the complexities of integrating digital assets into traditional financial frameworks. As the May deadlines approach, stakeholders within the cryptocurrency and investment sectors will closely monitor the SEC's forthcoming decisions, which could significantly influence the trajectory of XRP and the broader digital asset market.
The SEC's cautious regulatory approach towards cryptocurrency ETFs highlights the complexity of integrating digital assets into traditional financial systems. May 2025 will be a decisive moment for the future of XRP and cryptocurrency markets.
