The Race for an XRP ETF Heats Up: Canary Capital Group Joins the Fray

The Race for an XRP ETF Heats Up: Canary Capital Group Joins the FrayThe race for an exchange-traded fund (ETF) tracking XRP, the seventh-largest digital token, has begun to heat up. Canary Capital Group, a new investment firm focused on digital assets founded in September, filed with the U

The Race for an XRP ETF Heats Up: Canary Capital Group Joins the Fray

The race for an exchange-traded fund (ETF) tracking XRP, the seventh-largest digital token, has begun to heat up. Canary Capital Group, a new investment firm focused on digital assets founded in September, filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday to launch the CanaryXRPETF. Just a week earlier, Bitwise Asset Management Inc. was the first to file for an ETF tracking the token.

Founded by Steven McClurg, a former co-founder of Valkyrie Funds, Canary said in a statement it was encouraged by signs of a more progressive regulatory environment and the growing demand from investors. The move comes after the highly anticipated bitcoin and Ethereum ETFs launched earlier this year, and companies like VanEck Asset Management and 21Shares AG are also looking to launch funds linked to the Solana token. Bitcoin ETFs have attracted almost $19 billion in assets since their debut, while Ethereum ETFs have seen outflows of about $550 million.

Canarys filing didnt include a ticker symbol or expected fees. This would be the firms first ETF. The XRP filing suggests issuers are pushing regulators to open the crypto craze to a wider retail audience.

This demonstrates that ETF providers are paying close attention to the regulatory landscape to seek opportunities to launch new products," said Stephane Ouellette, co-founder and CEO of FRNT Financial. Whether they get approved is still uncertain, but for two firms with a crypto-native origin, it makes sense to try to broaden their product offerings.

The move comes after a federal judge in August ordered Ripple Labs Inc. to pay a civil penalty after years of litigation over the company selling its XRP tokens to institutional investors without registering with U.S. regulators. In September, crypto asset manager Grayscale Investments said it began offering the Grayscale XRP Trust, designed to give investors exposure to the XRPLedger token, a distributed, peer-to-peer network designed to facilitate cross-border financial transactions.

Canary Capital Groups entry further intensifies the race for an XRP ETF. Bitwise Asset Management Inc.s application has already garnered market attention, and Canary Capital Groups entry indicates that more institutional investors are actively seeking entry into the XRP market.

Its worth noting that while regulators stance towards cryptocurrencies is becoming increasingly positive, the unique circumstances surrounding XRP, including Ripple Labs Inc.s previous lawsuit, could impact the approval process for these ETFs. Ultimately, the SECs decision will determine whether they are approved.

The outcome of this race will have a significant impact on XRPs price and liquidity. If the ETFs are approved, it could attract more investors to the XRP market, potentially driving up XRP prices. However, if the ETFs are rejected, it could have a negative impact on the XRP market.

The direction of this race will serve as a bellwether for the future development of the cryptocurrency market. Investors will closely watch the SECs decision and the subsequent market reaction.