SEC Set to Decide on Grayscale Spot XRP ETF Application: Major Ripple Milestone Expected
The U.S. Securities and Exchange Commission (SEC) is on the verge of a crucial decision regarding Grayscale Investments’ bid to convert its XRP Trust into a spot exchange-traded fund (ETF). This decision, anticipated by Thursday, February 13, could significantly impact the future of XRP as an investment product and provide clarity on the SEC’s stance on the cryptocurrency, particularly in light of its ongoing legal dispute with Ripple, the company behind XRP.
Grayscale’s Ambitious Push for XRP ETF
Grayscale, which currently manages approximately $16.1 million in assets through its XRP Trust, has filed to convert the trust into an ETF. This move would allow investors to gain exposure to XRP without the complexities of owning the cryptocurrency directly, making it more accessible to traditional investors. If approved, the XRP ETF would be listed on the prestigious New York Stock Exchange, offering a new avenue for institutional and retail investors to participate in XRP trading.
SEC’s Potential Approval and Legal Context
The SEC is required to respond within a 15-day window after Grayscale’s filing, which was submitted on January 30, 2025. While the SEC has been cautious regarding crypto ETFs in the past, the situation with XRP could be different due to the legal context surrounding the cryptocurrency. A key federal court ruling determined that XRP is not a security when traded on secondary markets, which may influence the SEC’s approach to approving an ETF for XRP.
The approval of an XRP spot ETF would mark a significant shift in the SEC’s treatment of XRP and could set a precedent for other cryptocurrencies seeking similar financial products. XRP’s classification as a non-security on secondary markets strengthens the argument for an ETF approval, aligning with the legal precedent set by the court.
High Likelihood of Approval: Market Sentiment
Bettors on Polymarket, a popular prediction market platform, have placed an 81% probability on the SEC approving the spot XRP ETF in 2025. This high level of confidence underscores the growing optimism surrounding the decision. However, the outcome of Ripple’s ongoing legal battle with the SEC remains a critical factor that could sway the SEC’s final decision.
XRP price has seen a near 30% drop since its January peak, reflecting broader market trends, as well as the uncertainty surrounding regulatory developments. Despite this, the potential approval of the XRP ETF could reignite bullish sentiment and drive significant institutional interest, impacting the cryptocurrency’s price and adoption.
XRP’s Struggles Amidst Bear Market
As XRP awaits the SEC’s decision, the asset has entered a bear market, with daily trading volume and futures open interest showing signs of decline. Despite the setback in price, many analysts remain optimistic about the long-term prospects of XRP, especially if the ETF is approved. The successful conversion of Grayscale’s XRP Trust into an ETF would not only bolster XRP’s legitimacy in the eyes of institutional investors but also solidify its place in the evolving crypto landscape.
