WisdomTree Seeks XRP ETF Launch as Token Soars

WisdomTree Inc. is seeking permission to create an ETF that holds XRP, the cryptocurrency backed by blockchain firm Ripple Labs Inc. that has soared to become the third-largest digital currency. 

New York-based WisdomTree, which manages $77.2 billion in 79 exchange-traded funds, filed Monday, Dec. 2 to create the WisdomTree XRP Fund. It launched an XRP exchange-traded product last week on European exchanges. 

Crypto ETF applications are flooding the Securities and Exchange Commission following the Nov. 5 election of Donald Trump, who has vowed to turn the U.S. into a global crypto hub. WisdomTree joins Bitwise Asset Management, 21Shares and Canary Capital in seeking to issue a fund that tracks XRP, a digital currency that’s nearly doubled over the past week, apparently regaining credibility since a 2020 scandal involving main backer Ripple Labs.

XRP aims at cross-border payments and, according to Ripple Labs, carries out transactions faster than bitcoin while using less energy. It’s nearly doubled this past week to replace Tether as the No. 3 cryptocurrency behind bitcoin and Ethereum, according to Coinmarketcap.com.

In July 2023, three years after the SEC filed a lawsuit in response to the scandal, a federal judge ruled in favor of Ripple.

XRP, Bitcoin, Ethereum

Investors are pouring money into spot bitcoin and Ethereum ETFs, currently the only crypto exchange-traded funds available in the U.S. that directly own the underlying digital currency. Through the end of last week, spot crypto funds have pulled in $34.6 billion this year, with bitcoin taking in more than $30 billion, according to Farside Investors. 

Issuers are betting on an opening up of the crypto ETF market under a Trump administration and are seeking permission to create funds based on lesser-known currencies including HBAR, Litecoin and Solana. They are also betting the pending departure of SEC Chair Gary Gensler, who repeatedly warned that cryptocurrencies are vulnerable to fraud, will create a more crypto-friendly regulatory environment. 

WisdomTree currently trades a single crypto ETF, the $342.1 million WisdomTree Bitcoin Fund (BTCW), which jumped 64% in the last three months.

etf.com parent company, U.K.-based investing firm ETFS Capital, is WisdomTree's largest shareholder. The firm, owner of a slate of ETF industry-related companies, holds 10.2% of WisdomTree’s outstanding shares. That total climbs to 18.3% when combined with its series A preferred stock. ETFS Capital is seeking to add several of its own candidates to the WisdomTree board of directors.