The U.S. Securities and Exchange Commission (SEC) has begun to explore the possibility of approving an altcoin exchange-traded fund (ETF), but the pace remains slow. Despite recent steps toward a Litecoin ETF, the SEC is taking a cautious approach, particularly as it navigates a leadership vacuum. With the confirmation of Trump’s nominee for SEC Chair still pending, the Commission’s under-staffed status is likely contributing to its hesitance.
Grayscale, the asset management firm behind the third-largest Bitcoin ETF, has proven its ability to diversify its crypto portfolio. After launching the Mini Bitcoin ETF and options trading products, Grayscale’s latest venture involves converting its XRP Trust into an ETF. This trust currently holds nearly $16 million in assets. The introduction of an XRP ETF has long been anticipated in the crypto community, with several other firms, including Wisdom Tree, 21Shares, Canary Capital, and Bitwise, also awaiting SEC approval for their XRP ETF applications.
Ripple CEO Brad Garlinghouse is confident that approval is “inevitable,” and with betting markets like Polymarket offering overwhelming odds in favor of success, optimism remains high. However, the SEC’s ongoing lawsuit with Ripple is complicating matters. Although the case was recently removed from the SEC’s website, it has not been formally dismissed. Until that happens, the SEC may hesitate to approve any XRP-related financial products.
Jake Chervinsky, a prominent crypto lawyer, has been vocal about the SEC’s stance, urging the Commission to end its enforcement actions against crypto companies. He criticizes the lack of public steps to remedy these issues and questions why the SEC is waiting.
Despite these delays, ETF analyst James Seyffart recommends patience. With the SEC’s leadership still unsettled, Seyffart believes the Commission should focus on its pro-crypto realignment after new leadership is confirmed. For now, the XRP ETF is a likely prospect, though approval may take longer than expected. The price of XRP remains largely unchanged since Grayscale’s application, though market sentiment remains bullish.
Potentially Hot take:
— James Seyffart (@JSeyff) January 30, 2025
The SEC doesn’t have much of a reason to rush as quickly as possible on this stuff. I personally think they should handle these situations after Atkins is confirmed and in his seat at the SEC. https://t.co/AFyiKvLqlK
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Also Read: Litecoin (LTC) Set for ETF Approval as Grayscale, CoinShares, and Canary Lead the Charge
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