There is no doubt that spot ETFs for cryptocurrencies have been a huge trend over the past two years. These funds represent the entry of large institutions into the cryptocurrency market and help bring liquidity to the market.
Certainly, Bitcoin ETFs were the first, followed by Ethereum ETFs, and then the field was opened for other currency funds, the latest being the XRP ETF fund. In this article, we will discuss the details of the fund.
What are spot ETF funds?
It is an investment vehicle that facilitates investment in cryptocurrencies without complications and in a manner closer to stock trading experiences. The spot ETF fund works by having the issuing company purchase the currencies and hold them itself or through a custodian company, then the issuing company of the fund issues shares that represent these currencies.
For example: the company owns 100 Bitcoin and issues 10,000 shares so that each share represents 0.01 Bitcoin. As a result, the price of this share is close to the price of Bitcoin. Therefore, if you wish to invest in Bitcoin, you can easily buy the share and keep it in your account as if you were directly investing in Bitcoin.
Of course, in ETF funds you give up some advantages to gain others. For example, unlike owning real currencies, you cannot withdraw these currencies in ETF shares. Additionally, you have a higher level of security as the responsibility for holding the currencies lies with the custodian company and not with you personally.
Therefore, ETF funds are often more suitable for someone who does not classify themselves as an investor in the cryptocurrency market, but rather a person who has not entered this market due to fears of complexities related to security and others.
Why was the XRP ETF fund delayed?
Although Ripple is the third largest cryptocurrency excluding stablecoins, the launch of an ETF for it was supposed to be quicker. However, the problem lies in the fact that the Ripple project has faced a difficult period of 5 years of legal and regulatory issues with the U.S. Securities and Exchange Commission (SEC).
The authority viewed XRP as a security, and therefore it should be treated similarly to stocks. This case had a significant impact on the cryptocurrency market, as many platforms moved to delist XRP for fear of potential future issues.
Despite Ripple winning this case, the legal situation for XRP did not improve immediately. It is clear that this issue may have delayed the approval of the ETF, especially since the authority responsible for approving ETF funds is the same SEC that was involved in the case with the Ripple project.
How do you invest in the XRP ETF fund in the Gulf?
If you are in any of the Gulf countries, you can invest in the XRP ETF fund if you have an account on any American stock trading platform.
If you log into your account on the platform and search for XRPC, you will see the Canary Capital fund for XRP.
The fund is available on the Nasdaq exchange and you can buy it easily.
