- The SEC has acknowledged Grayscale’s applications for XRP and Dogecoin ETFs, marking the start of a 240-day review period that could lead to mainstream investor access to these cryptocurrencies.
- While Dogecoin’s approval chances seem strong, XRP faces potential delays due to ongoing legal battles with the SEC.
The cryptocurrency market took another step toward mainstream adoption as the U.S. Securities and Exchange Commission (SEC) officially acknowledged Grayscale’s applications for spot XRP and Dogecoin exchange-traded funds (ETFs). This marks the beginning of a 240-day review period, with the first 45 days starting once the filings appear in the Federal Register.
A Potential Shift in SEC’s Stance on Crypto ETFs
The SEC’s recognition of these filings on February 13 signals a potential shift in its stance on crypto-based investment products. Historically, the agency has been hesitant to approve such ETFs, but recent developments suggest a change in approach. Notably, the SEC has also approved applications for Litecoin (LTC) and Solana (SOL) ETFs, indicating a growing acceptance of digital assets within regulated financial markets.
This change in perspective follows years of resistance, including several rejected applications under former SEC Chair Gary Gensler. Grayscale even had to take legal action to push for approval of its Bitcoin Trust’s conversion into an ETF. Now, with the regulatory body acknowledging its latest applications, the crypto community is cautiously optimistic.
What Are the Odds of Approval?
Bloomberg ETF analysts James Seyffart and Eric Balchunas estimate that Dogecoin has a 75% chance of approval, while XRP sits at a lower but still promising 65%. Litecoin’s approval chances are even higher, standing at 90% by the end of 2024. If approved, these ETFs could provide mainstream investors with easier access to digital assets without directly holding cryptocurrencies.
The Legal Challenge: XRP Faces Regulatory Hurdles
Despite the optimism, XRP’s path to ETF approval is not without obstacles. The SEC is still appealing a court ruling that determined XRP is not a security when traded on secondary markets. Until this legal battle between the SEC and Ripple Labs reaches a final resolution, XRP’s ETF application could face significant delays.
Dogecoin, on the other hand, appears to have a smoother road ahead. Unlike XRP, regulators have not classified it as a security, and its structure is similar to Bitcoin, which has already secured ETF approval. This makes DOGE’s case for an ETF much stronger and less prone to regulatory scrutiny.
What’s Next for Crypto ETFs?
With the SEC’s 240-day review period officially in motion, the crypto industry eagerly awaits the outcome. If these ETFs receive approval, it could mark a major milestone in legitimizing digital assets for traditional investors. More people could gain exposure to XRP and Dogecoin through conventional stock exchanges, further integrating cryptocurrencies into mainstream finance.
