The Prospect of an XRP Exchange-Traded Fund (ETF) is Gaining Traction as Investor Demand Grows

The prospect of an XRP exchange-traded fund (ETF) is gaining traction as investor demand grows. Matt Hougan, Chief Investment Officer at Bitwise

Investors are showing increasing interest in a XRP exchange-traded fund (ETF), a topic that was recently discussed by Bitwise Chief Investment Officer Matt Hougan in an interview with CNBC. Hougan highlighted the strong demand among investors for a regulated investment product that focuses on XRP.

During the interview, the CNBC host noted that while there has been substantial interest in Bitcoin ETFs, Ethereum ETFs have not attracted as much demand. However, the adoption of various digital assets continues to rise, prompting a question about the potential for an ETF that focuses on XRP.

Hougan confirmed that there is a lot of interest in an XRP ETF, attributing this to two main reasons. Firstly, he highlighted the asset’s strong and dedicated user base, which has remained active despite market fluctuations. Secondly, he pointed out that the token consistently generates high trading volumes on centralized exchanges, reflecting ongoing investor engagement.

A glance at market data seems to support Hougan’s statements. According to CoinMarketCap, the token recorded $3.74 billion in trading volume over the past 24 hours, with weekly trading volume exceeding $33 billion. On a monthly scale, trading activity amounted to over $162 billion. These figures suggest that XRP remains one of the more actively traded cryptocurrencies, strengthening the case for a structured investment product.

Hougan emphasized that many investors are looking for a convenient and cost-effective way to gain exposure to XRP, and a regulated ETF would provide such an opportunity, simplifying access for both retail and institutional investors.

Another factor contributing to optimism about an XRP ETF is the evolving stance of the U.S. Securities and Exchange Commission (SEC). Hougan noted that under the current administration, the regulatory environment has become more open to discussions on new digital asset products. This shift marks a departure from the SEC’s historically restrictive approach, particularly regarding cryptocurrency staking and in-kind transactions.

Recent developments indicate that the SEC is actively considering multiple XRP ETF applications. The agency has acknowledged six proposals, including submissions from Bitwise, Grayscale, and WisdomTree. Of particular note is Grayscale’s filing, which has progressed further, as the SEC has entered it into the federal register, initiating an eight-month review period. This formal step suggests that the agency is taking the proposal seriously, increasing the likelihood of eventual approval.

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Beyond this token, Hougan believes the evolving regulatory landscape could pave the way for additional crypto investment products, including Solana ETFs. The SEC’s willingness to evaluate a broader range of digital assets suggests that more ETFs could emerge in the coming years.

Hougan also expressed optimism about the future of crypto-based ETFs, particularly index funds that track multiple digital assets. He described an index-based ETF as a highly desirable investment option, as many market participants prefer diversified exposure to the cryptocurrency sector rather than investing in individual assets.

He suggested that such a product could launch by the end of 2025, providing investors with a more comprehensive way to engage with the market. If approved, an index-based ETF could represent a significant step forward in integrating cryptocurrencies into mainstream finance.

Overall, the growing demand for an XRP ETF, combined with regulatory developments and increasing market activity, suggests that a structured investment product could become a reality shortly.