The race to launch the first spot XRP exchange-traded fund (ETF) has taken a significant leap forward, with the U.S. Securities and Exchange Commission (SEC) officially acknowledging Bitwise’s application—marking a pivotal moment in the evolving crypto regulatory landscape.
This milestone places Bitwise among an elite group of asset managers, including 21Shares, Grayscale, and CoinShares, whose XRP ETF filings have now been formally accepted for review. While acknowledgment is not approval, it signals a clear shift in the SEC’s posture toward digital asset innovation—especially as speculation grows that up to $8 billion in investor inflows could follow an eventual green light.
SEC Acknowledgment: A Signal of Change
The SEC’s decision to acknowledge multiple XRP ETF applications—including Bitwise’s recent filing—represents more than procedural progress. It reflects a growing institutional openness to cryptocurrency-based financial products.
Historically, XRP-related applications were routinely dismissed or returned without review. Now, their formal acceptance suggests regulators are taking them seriously. Analysts interpret this as evidence of a broader strategic pivot within the SEC, moving away from the rigid enforcement stance associated with former Chair Gary Gensler.
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Lucas Sorlini, product head at Northstake, a crypto institutional platform, believes the chances of approval are strong. “The likelihood of an XRP ETF approval is high,” Sorlini told DL News, noting that such funds could attract between $400 million and $800 million in inflows during their first week alone.
JPMorgan has gone even further, projecting that successful XRP ETFs could draw as much as $8 billion in total inflows within their first year of trading—highlighting the massive pent-up demand among institutional and retail investors alike.
The Growing Momentum Behind XRP ETFs
With four major applications now under active review—Bitwise, 21Shares, Grayscale, and CoinShares—the momentum behind XRP ETFs continues to build. Although filings from WisdomTree and Canary Capital remain unacknowledged, market sentiment remains bullish.
Prediction markets reflect this optimism. On Polymarket, traders are pricing in a 78% probability of an approved XRP ETF by the end of 2025. Meanwhile, Bloomberg Intelligence analysts Eric Balchunas and James Seyffart estimate the odds at 65%, citing increased regulatory clarity and political support for pro-crypto reforms.
This wave of interest isn’t limited to XRP. Asset managers are also pursuing ETFs tied to other major altcoins like Solana, Litecoin, and Dogecoin—indicating a broader push to expand crypto’s presence in traditional finance.
Much of this momentum stems from shifting political winds. Former President Donald Trump’s vocal support for crypto deregulation—including promises to end what he calls the “crypto crackdown”—has energized issuers and investors alike. Though no formal policy changes have occurred yet, the market is acting on expectations of a friendlier regulatory environment ahead.
Ripple’s Legal Battle: A Turning Point?
The path to an XRP ETF is deeply intertwined with Ripple Labs’ ongoing legal battle with the SEC. In 2020, the regulator sued Ripple for allegedly conducting an unregistered securities offering through XRP sales to institutional investors.
However, in a landmark 2023 ruling, a federal judge found that XRP itself is not a security, though certain institutional sales may have violated securities laws. The SEC appealed, prolonging uncertainty—but many believe the appeal will soon be paused or dropped altogether.
John Reed Stark, former chief of the SEC’s Office of Internet Enforcement, suggested on LinkedIn that the agency may soon halt its appeal of the Ripple case, just as it has done with major actions against Binance and Coinbase.
“The writing is now on the wall: SEC crypto-enforcement has officially expired,” Stark wrote.
Jacob Joseph, senior research analyst at CCData, agrees: “The long-standing battle between the two is nearing an end.” If the appeal is withdrawn or settled, it would remove one of the final roadblocks to ETF approval.
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How XRP ETFs Compare to Bitcoin and Ethereum
When evaluating the potential success of XRP ETFs, investors often look to Bitcoin and Ethereum as benchmarks.
Bitcoin ETFs made history after SEC approval in January 2024, drawing over $1.6 billion in net inflows during their first week—excluding outflows from Grayscale’s converted fund. The launch catalyzed widespread institutional adoption and solidified BTC’s status as a legitimate asset class.
Ethereum ETFs, by contrast, had a weaker debut. Despite strong initial interest, outflows from Grayscale’s Ethereum Trust outweighed new investments, resulting in a net outflow of $483 million in the first week.
Yet experts believe XRP ETFs could outperform Ethereum’s early results. With Ripple’s technology already adopted by over 100 financial institutions globally and strong international remittance use cases, XRP offers unique utility that may appeal to both traditional finance players and crypto-native investors.
Sorlini notes that first-week inflows for XRP ETFs will depend on several factors:
- Institutional investor appetite
- Overall market conditions
- Number of competing ETFs at launch
Still, he maintains that $400 million to $800 million in initial inflows is a “reasonable range.”
A recent report from S&P Global’s Crisil Coalition Greenwich adds weight to this view: nearly 40% of surveyed fund managers expressed willingness to invest in altcoins like XRP—a clear signal of growing institutional openness.
Frequently Asked Questions (FAQ)
Q: What does SEC acknowledgment mean for an XRP ETF?
A: Acknowledgment means the SEC has accepted the application for review—it doesn’t guarantee approval but indicates serious consideration. It’s a critical early step in the process.
Q: Has any XRP ETF been approved yet?
A: No. As of now, no spot XRP ETF has been approved. However, multiple applications are under active review, increasing the likelihood of eventual approval.
Q: How much money could flow into XRP ETFs?
A: JPMorgan estimates up to $8 billion in inflows within the first year. First-week inflows could range from $400 million to $800 million based on market conditions.
Q: Why is Ripple’s lawsuit important for ETF approval?
A: The SEC’s case against Ripple created regulatory uncertainty around XRP’s classification. A favorable resolution strengthens the argument that XRP is not a security—key for ETF approval.
Q: Are other altcoin ETFs being considered?
A: Yes. Applications for Solana, Litecoin, and Dogecoin ETFs are also in progress, reflecting growing demand for diversified crypto exposure in traditional markets.
Q: What happens if the SEC rejects XRP ETF applications?
A: Issuers can revise and resubmit filings. Past rejections—such as those for Bitcoin ETFs—were eventually overcome after legal challenges and market pressure.
Final Outlook: A New Era for Crypto Finance
The acknowledgment of Bitwise’s XRP ETF application is more than a procedural win—it’s a symbol of transformation in U.S. financial regulation. With mounting institutional interest, favorable market signals, and political momentum, the chances of an approved XRP ETF have never been higher.
If greenlit, such a product could unlock billions in capital while legitimizing altcoins as investable assets beyond Bitcoin and Ethereum.
As regulatory tides turn and legacy financial players embrace blockchain innovation, the era of mainstream crypto adoption may finally be arriving.
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