The cryptocurrency market is buzzing once again as XRP surges to around $2.30, fueled by growing optimism over a potential U.S. spot ETF approval. Investor sentiment is shifting bullish, with many viewing this development as a pivotal moment for XRP’s institutional adoption and long-term legitimacy. While the legal debate over whether XRP qualifies as a security continues—pending final court rulings—the Securities and Exchange Commission’s (SEC) recent actions suggest regulatory momentum is building in favor of approval.
SEC Begins Review of WisdomTree XRP Trust
In a significant development, the U.S. Securities and Exchange Commission has officially opened its review process for the WisdomTree XRP Trust, a proposed spot exchange-traded fund (ETF) that would track the price of XRP. If approved, this would mark the first U.S.-based spot XRP ETF, offering investors a regulated, accessible way to gain exposure to the digital asset without needing to manage private keys or crypto wallets.
The application was filed through the Cboe BZX Exchange and proposes to use the CME CF Ripple-Dollar Reference Rate as its pricing mechanism. This benchmark is designed to reflect real-time, global XRP market activity across major exchanges, ensuring transparency and reliability. By integrating with traditional brokerage platforms, the ETF could open the door for mainstream investors—including retirement accounts and institutional funds—to participate in XRP’s growth.
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Why This ETF Matters for Market Legitimacy
The introduction of a spot ETF represents more than just a new investment vehicle—it signals growing regulatory acceptance of digital assets. Historically, the SEC has been cautious about approving spot crypto ETFs due to concerns over market manipulation, custody risks, and investor protection. However, the agency's decision to formally review the WisdomTree proposal suggests increasing confidence in the maturity and resilience of the XRP ecosystem.
For years, XRP has operated in a gray regulatory zone. Although a partial ruling in SEC vs. Ripple clarified that XRP sales on public exchanges do not constitute unregistered securities offerings, broader classification questions remain. The current ETF review process may serve as a de facto validation of XRP’s status as a non-security when traded in secondary markets.
Public Comment Period: A Crucial Step
As part of its standard procedure, the SEC has published Release No. 34-103124, inviting public feedback on the proposed ETF. This phase allows stakeholders—including investors, financial experts, and industry participants—to weigh in on key issues such as:
- Whether the fund structure adequately protects investors
- How it plans to prevent market manipulation
- The reliability of its reference rate and surveillance-sharing agreements
The Commission now has up to 240 days from the filing date to issue a final decision. During this window, regulatory clarity will be critical—not just for WisdomTree, but for other firms eyeing similar products for assets like Solana, Cardano, or Polkadot.
Ripple Reinforces XRP’s Non-Security Argument
Amid the ETF developments, Ripple Labs continues to push back against the SEC’s broader regulatory stance. Stuart Alderoty, Ripple’s Chief Legal Officer, recently submitted an additional letter to the SEC’s Crypto Task Force. In it, he directly addressed Commissioner Hester Peirce’s “New Paradigm” speech, which questioned when a digital asset evolves beyond an investment contract.
“Today, @Ripple submitted an additional letter to the SEC’s Crypto Task Force addressing a key question from Commissioner Peirce’s ‘New Paradigm’ speech: When does a digital asset separate from an investment contract?”
— Stuart Alderoty (@s_alderoty), May 27, 2025
Alderoty emphasized that XRP has long operated as a functional, decentralized currency used for cross-border payments and liquidity solutions—not as a speculative security tied to Ripple’s success. He criticized ambiguous terms like “decentralized” or “fully functional” for creating uncertainty in the market and called for clear, rules-based frameworks that promote innovation while protecting users.
This ongoing dialogue underscores a broader shift in Washington: from enforcement-first tactics toward structured policy-making that acknowledges crypto’s role in modern finance.
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Frequently Asked Questions (FAQs)
What is the WisdomTree XRP Trust?
The WisdomTree XRP Trust is a proposed spot exchange-traded fund that would allow U.S. investors to gain exposure to XRP’s market price through traditional brokerage accounts, without holding the actual cryptocurrency.
Why is the SEC reviewing this ETF now?
The SEC follows a formal process for all ETF applications. The review includes evaluating investor protection mechanisms, market surveillance capabilities, and potential risks like price manipulation—especially important for newer digital assets.
How does this affect XRP’s price and adoption?
ETF approval typically increases demand due to easier access for retail and institutional investors. It also enhances credibility, potentially attracting more businesses and financial platforms to support XRP.
Is XRP considered a security by the SEC?
Not definitively. A 2023 court ruling found that programmatic sales of XRP on exchanges are not securities transactions, though other sale types were deemed unregistered offerings. The final legal status remains under discussion.
What happens after the public comment period ends?
After gathering feedback, the SEC will analyze submissions and may request further information from WisdomTree before making a final determination—either approving, rejecting, or extending the review timeline.
Could other XRP ETFs follow if this one is approved?
Yes. Approval of the WisdomTree XRP Trust could set a precedent for similar filings from Grayscale, Bitwise, or ARK Invest, accelerating competition and product diversity in the crypto ETF space.
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Final Outlook: A Turning Point for XRP?
With the SEC actively reviewing the WisdomTree application and Ripple continuing to advocate for clear regulatory standards, 2025 could be a landmark year for XRP. The combination of legal progress, market readiness, and institutional interest paints a promising picture.
While no outcome is guaranteed, the current trajectory suggests that a spot XRP ETF is no longer a question of if, but when. For investors watching closely, this moment could represent one of the most significant catalysts for digital asset legitimacy in recent years.
As always, staying informed and understanding the evolving regulatory landscape is key to navigating this dynamic market with confidence.