Bitwise Expands XRP ETF Filing with New Investor Protections, Things To know

Bitwise, a leading crypto index fund manager, is making a bold move to bring the first U.S XRP exchange-traded fund (ETF). In a recent filing with the Securities and Exchange Commission (SEC), Bitwise provided new details about how it will protect assets and manage trading. These updates not only clarify Bitwise’s strategy but also hint at exciting developments for XRP ETFs in the U.S.

But will Bitwise’s ambitious plan succeed? Let’s explore.

Why Coinbase Custody Could Be a Game Changer

According to Bitwise’s updated S-1 filing, the XRP assets in its ETF will be secured through Coinbase Custody. Most of these assets will be stored in secure cold storage, with transfers to hot wallets occurring only when necessary for trading or covering expenses.

As a trusted platform for institutional clients, Coinbase Custody will keep Bitwise’s XRP assets separate from its own funds. This separation helps protect investors’ assets from unauthorized access or theft.

Trading Made Efficient

Coinbase will also act as the Prime Execution Agent for Bitwise’s XRP trades, managing all transactions across major exchanges like its own platform, Bitstamp, Kraken, and LMAX.

To ensure smooth operations, Coinbase will provide short-term financing when needed for quick trades. For larger transactions, known as “Baskets,” Bitwise will limit trades to blocks of 10,000 shares to maintain efficient fund management.

Managing Risks

Bitwise’s filing acknowledges the risks tied to the legal status of XRP, which is still under regulatory review. In a high-profile case against Ripple, the SEC has claimed that XRP is a security, although recent court decisions have started to challenge this view.

The filing warns that if XRP is ultimately classified as a security, the ETF could face serious consequences, including forced liquidation of its holdings.

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Investors, Take Note!

If either Bitwise or Canary Capital, another contender, secures approval for their ETF, it would mark the first U.S. spot XRP ETF, allowing investors regulated access to XRP. Currently, those seeking XRP exposure can only do so through the Grayscale XRP Trust on the Over-the-Counter (OTC) market.

The approval of these ETFs would be a major milestone, potentially opening the door to broader, regulated XRP trading.

Is this the moment we’ve been waiting for in the XRP market? Join the conversation.