The Nasdaq stock exchange is seeking approval to list and trade XRP and Litecoin exchange-traded funds from CoinShares, adding to a wave of new crypto ETF applications.
A Friday filing with the Securities and Exchange Commission comes as multiple firms look to introduce crypto ETFs beyond bitcoin, with Cboe submitting applications the same day for XRP funds from Bitwise, WisdomTree, Canary and 21Shares. The applications reflect financial services firms’ efforts to meet rising investor demand for crypto-focused products.
Read More: Crypto-Focused ETF Applications Surge as SEC Lightens Up
The push for new products comes amid changing regulatory dynamics at the SEC. Under acting Chair Mark Uyeda, the agency appears more open to considering crypto ETFs than it was under his predecessor, Gary Gensler. This regulatory evolution has prompted asset managers to explore opportunities beyond bitcoin-focused products.
XRP’s path to ETF approval faces unique challenges. The token has been at the center of a long-running legal battle with the SEC, which claimed it was sold as an unregistered security. While Ripple Labs, the creator and developer of the XRP token, secured a partial victory in 2023 when a federal judge ruled that XRP programmatic sales to exchanges that sell to retail investors did not break securities law (XRP is not a security according to this ruling), regulatory uncertainty persists, potentially complicating the SEC’s decision.
The filings mark the latest development in crypto’s integration with traditional finance. Last week, Grayscale’s Solana and Litecoin ETF applications were officially acknowledged by the SEC, following the firm’s success in converting its bitcoin trust to an ETF.
Under CoinShares’ proposal, the XRP ETF would track the Compass Crypto Reference Index XRP while the Litecoin ETF would follow a separate Litecoin index from the same provider. Both funds would allow investors to access these cryptocurrencies through their regular brokerage accounts.
According to the filings, both proposed ETFs would hold only their respective cryptocurrencies and cash, prohibiting any yield generation or staking.
If approved, these funds could broaden institutional access to alternative cryptocurrencies. Spot bitcoin ETFs have grown at a record pace since they received SEC approval on Jan. 10, 2024, generating nearly $41 billion in inflows, according to UK-based asset manager Farside Investors. Their success has underscored the wider embrace of traditional finance services firms for digital assets and helped send bitcoin and other cryptos to new highs.
