Canary Capital Files for XRP ETF, Joining Crypto Race

Firm founded by Valkyrie Funds' co-founder enters growing field of spot cryptocurrency XRP ETF proposals.

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DJ
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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Canary Capital Group, an investment firm founded by former Valkyrie Funds co-founder Steven McClurg, is seeking to issue an exchange-traded fund based on the XRP cryptocurrency, following Bitwise Asset Management last week becoming the first firm to file for an ETF based on the digital currency.

The Nashville-based firm’s S-1 registration statement, filed on Oct. 8 with the Securities and Exchange Commission, outlines the Canary XRP ETF. 

Read More: Bitwise Files to Create XRP Cryptocurrency ETF

The push for Canary XRP ETFs follows the successful launch of spot Bitcoin ETFs in January and Ethereum ETFs in July. Bitcoin ETFs have attracted $18.7 billion in inflows since their debut, according to data from U.K. asset manager Farside Investors. XRP is the token of the XRP Ledger, a blockchain network designed to facilitate cross-border payments, and is the seventh-largest cryptocurrency with $30.1 billion in assets, according to CoinMarketCap.

“We're seeing encouraging signs of a more progressive regulatory environment coupled with growing demand from investors for sophisticated access to cryptocurrencies beyond Bitcoin and Ethereum,” McClurg said in a statement. 

McClurg's former firm Valkyrie, which issued the Valkyrie Bitcoin Miners ETF (WGMI) was purchased this year by European ETF firm CoinShares. 

According to the filing, the proposed Canary XRP ETF would directly hold XRP and use a standardized reference rate “that is designed to reflect the performance of XRP in U.S. dollars.” This index is calculated based on trade flow from major XRP trading platforms.

It was recently trading at about 52 cents, down more than 0.1% over the past 24 hours, according to CoinMarketCap.

Growing Interest in Crypto ETFs

Bitwise, which filed its XRP ETF application on Oct. 2, already offers ETFs based on Bitcoin and Ether. Its Bitwise Bitcoin ETF (BITB) has generated over $2.1 billion in net inflows since January, ranking fourth among the 11 funds that debuted this year.

In September, crypto asset manager Grayscale Investments launched the Grayscale XRP Trust, aimed at providing investors exposure to XRP. The move fueled speculation that Grayscale may issue its own XRP ETF.

Read More: Grayscale Adds XRP Trust to Investment Lineup

The recent fillings for XRP ETFs comes amid ongoing regulatory scrutiny of the cryptocurrency. In July, a federal judge ruled that Ripple Labs’ institutional sales of XRP violated securities laws, while its programmatic sales on exchanges did not, according to the S-1 filing.

A graduate of The University of Texas, Arlington with a BA in Communications, DJ has covered retirement plans, mortgage news, and financial advisor trends. His background includes producing daily content, managing newsletters, and engaging with industry experts. DJ is excited to contribute to ETF coverage and learn more about the $10-trillion-dollar ETF industry. Outside of work, he enjoys exploring New York City's food scene, anime, and video games. 

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