Purpose Investments is preparing to launch Canada’s first XRP exchange-traded fund (ETF), aiming to provide institutional and retail investors with a regulated way to gain exposure to the cryptocurrency. The asset manager, known for introducing the first Bitcoin and Ethereum ETFs in Canada, has filed a preliminary prospectus with securities regulators to bring this new product to market.
If approved, the XRP ETF will operate as a spot ETF, meaning it will hold actual XRP tokens rather than derivatives, giving investors direct exposure to the asset’s price movements. This initiative reflects the growing demand for crypto ETFs as investors seek easier and safer ways to enter the market without handling the complexities of self-custody.
Purpose Investments has already established itself as a pioneer in the crypto ETF space. In 2021, it launched the world’s first spot Bitcoin and Ethereum ETFs, both of which trade on the Toronto Stock Exchange (TSX). These products provided a regulated gateway for institutional and retail investors to access major cryptocurrencies, setting a precedent for future crypto-based funds.
The firm’s founder and CEO, Som Seif, emphasized its ongoing commitment to bridging the gap between traditional finance and decentralized finance (DeFi). According to Seif, the growing adoption of XRP and increased institutional interest make this ETF a logical next step in expanding investment opportunities within a regulated framework.
Although exchange-traded products (ETPs) tracking XRP have been available in some global markets, Canada’s first spot XRP ETF would represent a significant milestone in offering transparent and direct exposure to the asset. This move aligns with a broader trend where asset managers worldwide are seeking regulatory approval for crypto ETFs.
In the United States, several investment firms have submitted applications for XRP ETFs to the Securities and Exchange Commission (SEC). Firms like Grayscale, CoinShares, Bitwise, WisdomTree, and 21Shares have all filed for approval, driven by shifts in the regulatory landscape. Additionally, other cryptocurrencies, including Solana (SOL), Litecoin (LTC), and Dogecoin (DOGE), have attracted ETF applications.
Changes in U.S. regulatory leadership have also fueled optimism. The resignation of SEC Chair Gary Gensler and expectations of a more crypto-friendly stance have encouraged asset managers to move forward with their filings. The SEC was expected to make preliminary decisions on these applications by late January, with Grayscale’s XRP ETF proposal facing a deadline of January 23, while other applications awaited rulings by January 25.
Purpose Investments has played a key role in expanding institutional access to cryptocurrency. In contrast to the U.S. market, which had to wait until January 2024 for SEC approval of spot Bitcoin ETFs, Canada has been ahead in embracing these products. Since their approval, U.S. spot Bitcoin ETFs have accumulated over $121 billion in assets, demonstrating strong demand for regulated crypto investment vehicles.
XRP’s price has also reflected the increasing enthusiasm for the asset. On January 15, XRP surged to $3.20, its highest level since 2018, before correcting to $3.09 by the end of the month, marking a 31% gain for January. This price movement occurred despite the SEC’s ongoing appeal against a July 2023 court ruling that determined XRP sales to retail investors were not securities transactions.
Market analysts suggest that an approved XRP ETF could attract between $3 billion and $6 billion in new investments, assuming adoption levels similar to those seen with Ethereum ETFs. This influx of capital could further solidify XRP’s position as a leading digital asset and provide investors with a regulated, institutional-grade way to participate in its long-term growth.
As regulatory developments unfold, the success of Purpose Investments’ latest ETF proposal could set the stage for broader adoption of crypto-based investment products, reinforcing Canada’s role as a leader in digital asset innovation.
