Purpose Investments, the firm behind the world’s first spot Bitcoin ETF, is broadening its digital asset offerings with a proposed spot XRP ETF, targeting pending regulatory approval.
Canadian Asset Manager Joins XRP Race
Veteran Toronto-based asset management firm overseeing over $23 billion in assets has become the latest participant to jump on the spot XRP ETF race.
Purpose Investments has filed a preliminary prospectus with Canadian securities regulators for the proposed Purpose Ripple exchange-traded fund.
Purpose was arguably the first asset manager to introduce spot Bitcoin and Ethereum ETFs, which debuted on the Toronto Stock Exchange in February and April 2021, respectively. Although XRP ETPs are already trading around the world, the company plans to follow its Bitcoin and Ethereum achievements by offering the world’s first spot XRP ETFs, as per the statement on Thursday.
Purpose Investments founder and CEO Som Seif highlighted the increasing institutional appetite in XRP as a rationale for the ETF.
“As XRP sees increasing adoption and institutional interest, we believe an ETF can offer investors a transparent and familiar way to access it within a regulated framework,” Seif opined.
The Purpose Ripple ETF aims to invest all of its assets in long-term holdings of Ripple-promoted XRP and to provide holders of ETF Units with the opportunity for long-term capital appreciation without the hassle of holding the cryptocurrency directly.
Canada vs. US
The announcement came shortly after NYSE Arca submitted a 19b-4 filing to convert Grayscale’s XRP Trust into a spot exchange-traded fund, with Coinbase Custody as the custodian and BNY Mellon Asset Servicing acting as the transfer agency.
Other asset managers, including WisdomTree, Canary Capital, 21Shares, and Bitwise, have also filed paperwork with the SEC to introduce spot XRP ETFs, pending regulatory approval.
Financial services giant JPMorgan estimated an approved spot XRP ETF could attract up to $8 billion in net assets over the first year — a prediction Bloomberg’s senior ETF analyst Eric Balchunas said was a “pretty reasonable guess.”
While the U.S.-based asset managers were the first to submit applications, Canada’s securities regulator generally greenlights crypto ETFs considerably faster compared to the U.S. SEC.
Meanwhile, asset managers have also filed for spot Litecoin (LTC), Dogecoin (DOGE), and even Official ***** memecoin (*****), with pundits saying issuers are testing what crypto products will be given the regulatory nod under the new pro-crypto Donald *****-era SEC.