Purpose Investments Plans to Launch Canada's First XRP Exchange-Traded Fund (ETF)

The asset manager, known for introducing the first Bitcoin and Ethereum ETFs in Canada, has filed a preliminary prospectus with securities regulators to bring this new product to market.

Canadian asset manager Purpose Investments is preparing to launch the country's first XRP exchange-traded fund (ETF), offering institutional and retail investors a regulated way to gain exposure to the cryptocurrency.

The asset manager, which is also known for introducing the first Bitcoin and Ethereum ETFs in Canada, has filed a preliminary prospectus with securities regulators to bring the new product to market.

If approved, the XRP ETF will operate as a spot ETF, which means it will hold actual XRP tokens rather than derivatives, giving investors direct exposure to the asset's price movements. The initiative reflects the growing demand for crypto ETFs as investors are seeking easier and safer ways to enter the market without handling the complexities of self-custody.

Purpose Investments has already established itself as a pioneer in the crypto ETF space. In 2021, it launched the world's first spot Bitcoin and Ethereum ETFs, both of which trade on the Toronto Stock Exchange (TSX). These products provided a regulated gateway for institutional and retail investors to access major cryptocurrencies, setting a precedent for future crypto-based funds.

The firm's founder and CEO, Som Seif, highlighted its ongoing commitment to bridging the gap between traditional finance and decentralized finance (DeFi). According to Seif, the growing adoption of XRP and increased institutional interest make this ETF a logical next step in expanding investment opportunities within a regulated framework.

While exchange-traded products (ETPs) tracking XRP have been available in some global markets, Canada's first spot XRP ETF would represent a significant milestone in offering transparent and direct exposure to the asset.

The move also aligns with a broader trend where asset managers worldwide are seeking regulatory approval for crypto ETFs. In the United States, several investment firms have submitted applications for XRP ETFs to the Securities and Exchange Commission (SEC).

From Grayscale to CoinShares, Bitwise, WisdomTree, and 21Shares, a wave of asset managers have filed for the launch of XRP ETFs. The filings come amid shifts in the regulatory landscape and are driven by the SEC's expected decisions on several applications by late January.

While Grayscale's XRP ETF application is set to reach a deadline of January 23, other applications are expected to receive rulings by January 25. The SEC is expected to make preliminary decisions on these applications.

Besides XRP ETFs, other cryptocurrencies such as Solana (SOL), Litecoin (LTC), and Dogecoin (DOGE) have also attracted ETF applications from asset managers. Changes in U.S. regulatory leadership, including the resignation of SEC Chair Gary Gensler and expectations of a more crypto-friendly stance, have also fueled optimism.

In contrast to the U.S. market, which had to wait until January 2024 for SEC approval of spot Bitcoin ETFs, Canada has been ahead in embracing these products. Since their approval, U.S. spot Bitcoin ETFs have already accumulated over $121 billion in assets, showcasing the strong demand for regulated crypto investment vehicles.

XRP's price has also reflected the increasing enthusiasm for the asset. On January 15, XRP surged to $3.20, its highest level since 2018, before correcting to $3.09 by the end of the month, marking a 31% gain for January.

This price movement occurred despite the SEC's ongoing appeal against a July 2023 court ruling that determined XRP sales to retail investors were not securities transactions. According to market analysts, an approved XRP ETF could attract between $3 billion and $6 billion in new investments, assuming adoption levels similar to those seen with Ethereum ETFs.

The influx of capital could further solidify XRP's position as a leading digital asset and provide investors with a regulated, institutional-grade way to participate in its long-term growth. As regulatory developments unfold, the success of Purpose Investments' latest ETF proposal could set the stage for broader adoption of crypto-based investment products, reinforcing Canada's role as a leader in digital asset innovation.