The SEC Acknowledges Cboe BZX’s Request to List 21Shares’ XRP ETF: A Sign of Progress for Crypto

In a regulatory filing dated February 14, the United States Securities and Exchange Commission (SEC) acknowledged Cboe BZX’s request to list an exchange-traded fund (ETF) sponsored by asset manager 21Shares, specifically the Core XRP Trust ETF. While this acknowledgment does not constitute an approval of the ETF, it signals a positive step forward for U.S. exchanges seeking to list ETFs that hold spot XRP. The filing indicates that the SEC is actively reviewing the proposal, which is a significant development in the crypto industry’s ongoing efforts to gain regulatory approval for spot cryptocurrency ETFs.

The SEC Changes Tune on Crypto: A Shift Toward Regulatory Clarity

The SEC has historically been perceived as one of the toughest regulators for the cryptocurrency industry, often taking a cautious and sometimes adversarial stance toward digital assets. However, recent developments suggest a potential shift in the SEC’s approach, particularly under the leadership of U.S. President Donald Trump, who has expressed a desire to make America a global crypto hub. This shift is evident in the SEC’s recent acknowledgment of Cboe BZX’s request and its prior approvals of Bitcoin and Ether-based ETFs.

The SEC’s reasoning for approving Bitcoin and Ether ETFs was outlined in a response filing, where the Commission stated that sufficient measures had been demonstrated to prevent fraud and manipulation, thereby justifying the approval of these funds without requiring a surveillance-sharing agreement. This rationale likely sets a precedent for the potential approval of other spot cryptocurrency ETFs, including those based on XRP. Cboe BZX has recently sought permission to list four spot XRP ETFs, including the 21Shares Core XRP Trust, further indicating the growing momentum for spot crypto ETFs in the U.S. market.

The Rise of Spot Crypto ETFs: XRP Joins Bitcoin and Ether in the Commodity Trust Category

The proposed listing of the 21Shares Core XRP Trust ETF under BZX Rule 14.11(e) categorizes XRP as a commodity trust, placing it in the same regulatory framework as spot Bitcoin and Ether ETFs. This classification is significant, as it aligns XRP with other major cryptocurrencies that have already secured approval for their respective ETFs. The filing further explains that the shares will be registered with the SEC through a registration statement on Form S-1, ensuring compliance with federal securities laws.

21Shares submitted its application to launch the Core XRP Trust ETF in November, just days before President Trump’s election victory on November 5. This timing reflects the broader industry’s optimism about a more crypto-friendly regulatory environment under the Trump administration. The SEC’s acknowledgment of Cboe BZX’s request is a promising indicator that the regulatory body is open to considering spot XRP ETFs, following in the footsteps of Bitcoin and Ether.

A Surge in Crypto ETF Applications: Memecoins, Altcoins, and Index Funds

The lead-up to the U.S. elections and President Trump’s inauguration saw a flurry of activity in the crypto ETF space. Financial issuers rushed to file for the listing of over a dozen crypto ETFs, reflecting the industry’s expectation of a more favorable regulatory environment under the Trump administration. These filings include not only ETFs focused on major cryptocurrencies like Bitcoin and Ether but also those targeting alternative cryptocurrencies, or "altcoins," such as Solana and Litecoin.

Additionally, the rise of memecoins has not gone unnoticed by ETF issuers. Applications have been submitted for ETFs featuring Dogecoin Official Trump (TRUMP) and Bonk (BONK), among others. This diversity in filings underscores the industry’s confidence in the SEC’s evolving stance on crypto and its willingness to approve a broader range of digital assets. Furthermore, issuers are preparing for the potential approval of crypto index ETFs, which would provide investors with exposure to a wide range of digital tokens through a single investment vehicle.

On February 14, the first spot crypto index fund, the Hashdex Nasdaq Crypto Index US ETF, began trading on Nasdaq, marking another milestone in the integration of cryptocurrencies into traditional financial markets. This index fund tracks the performance of a basket of cryptocurrencies, offering investors diversified exposure to the crypto market. The launch of this fund, combined with the SEC’s acknowledgment of Cboe BZX’s request, suggests that the U.S. market is on the cusp of a new era of crypto adoption.

The Road Ahead: What’s Next for Spot Crypto ETFs?

The acknowledgment of Cboe BZX’s request to list the 21Shares Core XRP Trust ETF is a positive sign for the crypto industry, but it is important to remember that this is not yet an approval. The SEC still has several steps to take before the ETF can be officially listed and traded. However, the fact that the SEC is actively reviewing the proposal and has provided a rationale for its recent approvals of Bitcoin and Ether ETFs suggests that the regulatory environment is becoming increasingly favorable for spot crypto ETFs.

Analysts such as Eric Balchunas and James Seyffart have noted that the odds of approval for spot crypto ETFs, including those based on XRP, Litecoin, Solana, and Dogecoin, are relatively high. Seyffart recently shared a table outlining the odds of approval for various spot crypto ETFs, with XRP being a key focus. While there is always uncertainty in the regulatory process, the recent developments suggest that the SEC is moving toward a more permissive stance on spot crypto ETFs.

Conclusion: Institutional Investment and the Future of Crypto

The growing number of ETF applications and the SEC’s acknowledgment of Cboe BZX’s request to list the 21Shares Core XRP Trust ETF highlight the increasing institutional interest in cryptocurrencies. As more ETFs come to market, they will provide investors with greater access to cryptocurrencies, further legitimizing digital assets and integrating them into traditional financial systems. The approval of spot crypto ETFs would also likely lead to increased institutional investment, driving growth and adoption in the crypto market.

While there are still challenges ahead, including regulatory uncertainties and market volatility, the progress made so far is a testament to the resilience and adaptability of the cryptocurrency industry. The acknowledgment of Cboe BZX’s request is a significant step forward, and the crypto community will be eagerly watching as the SEC continues its review of spot crypto ETFs. The potential approval of these ETFs could mark a major turning point for cryptocurrencies, bringing them further into the mainstream and cementing their place in the global financial landscape.