BlackRock’s Interest in XRP ETFs Raises Questions
Speculation is rising regarding BlackRock’s potential submissions for XRP ETFs. Vandell Aljarrah, an industry expert and co-founder of Black Swan Capital, has some thoughts on this. He believes that while it’s exciting for asset managers wanting to enter this market, investors should proceed with caution.
Aljarrah suggested that the anticipated move is more about promoting cryptocurrency adoption rather than empowering institutional investors. He pointed out that while the introduction of an ETF might appear to validate XRP on Wall Street, it could actually detract from the asset’s fundamental qualities.
The Catch with BlackRock’s XRP ETF
In a recent post, Aljarrah clarified that having an XRP ETF doesn’t necessarily equate to broader access to the functionalities that the underlying cryptocurrency offers. The idea here is that although the ETF may gain credibility, it limits access to what XRP can do, such as facilitating real-time remittances and enabling staking.
He does seem to think that BlackRock is serious about pursuing an XRP ETF. But there’s a warning: institutions could manipulate ETFs in subtle ways, leading to a shift in control from individual investors to large financial entities.
Building Momentum for XRP ETFs
Despite these concerns, interest in XRP ETF filings is definitely gaining traction. Since October 2024, more applications have been submitted to the U.S. Securities and Exchange Commission (SEC) by various asset managers. Companies like Bitwise, Grayscale, Wisdomtree, 21Shares, and ProShares are competing to launch both spot and future-based XRP ETFs. Some applications are currently under regulatory review, and ProShares has already received approval for three futures-based XRP ETFs, including inverse funds offering double exposure.
Grayscale, which is a key player in the crypto investment sphere, manages over $16 million in assets for the XRP Trust and is collaborating with NYSE Arca to secure listing approval. Meanwhile, Memx, a U.S. exchange, has submitted a proposal for XRP ETFs under a commodity-based trust structure, similar to those for Bitcoin and Ethereum.
Although BlackRock hasn’t yet filed for an XRP ETF, observers believe it’s just a matter of time. The firm has had significant success with Bitcoin and Ethereum ETFs, raking in over $43 billion. Analysts speculate that BlackRock is waiting for the right legal clarity and market conditions before making a move. Experts like Nate Geraci from ETF Store believe that BlackRock hasn’t let its competitors, like Bitwise and Grayscale, dominate the AltCoin ETF market for too long.
Shifting Regulatory Landscape
Meanwhile, the regulatory environment appears to be changing in favor of these filings, particularly after the Ripple-SEC lawsuit resolution. A court ruled in July 2023 that XRP itself is not classified as a security.
With the SEC withdrawing its appeal and resolving issues with Ripple, institutional hurdles have diminished. Following this decision, public comment periods have opened for several filings, and a 240-day review cycle has begun, increasing the chances of approval to over 80% in 2025.
