WisdomTree Expands Crypto Assets Product Line, XRP ETP Launched in Europe

WisdomTree, as a global financial innovation company, focuses on exchange-traded products, models, and blockchain technology solutions. As of September 2024, the company manages a record asset scale of $113 billion, demonstrating its significant position in the asset management industry.

In November 2024, WisdomTree launched the Physical XRP ETP (XRPW) in Europe, expanding its Crypto Assets product line. The product is listed on multiple European exchanges, including the Frankfurt Stock Exchange, SIX, and Euronext in Paris and Amsterdam, with a management fee of 0.50%. XRPW is fully backed by XRP, utilizing a dual custody model combined with cold storage to enhance security.

WisdomTree has accumulated rich experience in the field of digital assets. Its Enhanced Commodity Strategy Fund (GCC) is one of the earliest ETFs to provide exposure to Bitcoin futures. The company also invests in blockchain infrastructure providers and has launched a Crypto Mega Cap Equal Weight ETP backed by physical Crypto Assets.

It is worth noting that the regulatory environment for financial products related to crypto assets varies by region. Although WisdomTree has successfully launched a crypto assets ETP in Europe, the approval process in regions such as the United States is subject to different regulatory standards and scrutiny. The U.S. Securities and Exchange Commission ( SEC ) has been cautious about approving crypto assets ETFs, focusing on investor protection and market integrity.

WisdomTree's record in ETF submissions includes both approval and rejection cases. The SEC rejected its spot Bitcoin ETF proposals twice, in December 2021 and October 2022, citing concerns over fraud prevention and investor protection. However, in January 2024, the SEC approved WisdomTree's Bitcoin fund (BTCW), making it one of the first spot Bitcoin ETFs offered to U.S. investors.

WisdomTree's experience in dealing with complex regulatory environments indicates that it has strategic expansion advantages. However, the approval of new crypto assets ETPs (such as XRP ETP) will depend on the evolving regulatory dynamics and its ability to address regulatory issues.

In addition to WisdomTree, other companies such as 21Shares and Bitwise have also submitted applications for XRP ETFs to the SEC. 21Shares focuses on Crypto Assets ETPs and has played a significant role in introducing such products to the European market. Its spot Bitcoin ETF launched in collaboration with ARK Invest has accumulated $4.7 billion in assets. Bitwise Asset Management focuses on Crypto Assets management and has extensive experience in ETF approvals.

The approval of Crypto Assets ETFs (such as Bitcoin, Ethereum, or XRP) depends on market conditions, regulatory considerations, and the track record of the applying companies. Key factors include the maturity and transparency of the underlying market, as regulators focus on mechanisms to prevent fraud and market manipulation. Additionally, the SEC's regulatory framework and leadership stance play a significant role. Whether the applying companies can demonstrate robust custody solutions, investor protection measures, and compliance with existing securities laws also impacts the outcome.

The SEC has consistently taken a cautious approach towards Crypto Assets ETFs, leading to delays and rejections in approvals due to concerns over market maturity and regulatory oversight. However, the recent approvals of spot Bitcoin and Ethereum ETFs suggest that market acceptance of Crypto Assets financial products may be increasing. With potential changes in the regulatory environment, the outlook for Crypto Assets ETFs could further improve.

In this context, the XRP ETF applications submitted by WisdomTree, 21Shares, and Bitwise may be approved, but success is still not guaranteed. The companies' interactions with the SEC and their experience in managing crypto assets may enhance their prospects. However, the constantly changing regulatory environment and the SEC's consistent cautious stance on digital assets will be key factors in the final decision.