XRP ETF Buzz: Claims, Approvals, and the Automatic Pilot Myth

The world of XRP ETFs is buzzing with anticipation, speculation, and a healthy dose of confusion. Let's cut through the noise and get down to brass tacks about XRP ETFs, claims of automatic approval, and what the SEC's role really is.

The Great Automatic Approval Myth

Recently, whispers started circulating on social media about certain crypto ETFs, specifically an XRP ETF, getting the green light automatically due to the US government shutdown and the SEC's reduced operations. The story went that Teucrium's XRP ETF application was "automatically activated" because the decision window had closed.

Hold your horses! Cryptocurrency journalist Eleanor Terrett stepped in to clarify. Turns out, Teucrium's XRP ETF is structured around Treasury bonds, cash, and derivative receivables, placing it under Section 40 of the Investment Company Act of 1940. ETFs of this type don't require active SEC approval; they become active once the application period is up. It's a bit like setting your coffee maker to brew automatically in the morning – no human intervention needed at the crucial moment.

However, spot crypto ETFs—think LTC, SOL, or XRP—are a different beast. These are registered as "commodity trusts" under Section 33 of the Securities Act of 1933 and need explicit SEC approval to trade. So, while the government shutdown might have created some confusion, no spot XRP ETF is magically appearing on the market without the SEC's say-so.

The Race to Launch: Who's in the Running?

Despite the automatic approval myth, the reality is that several players are eagerly awaiting SEC approval for their spot XRP ETFs. Bitwise, 21Shares, WisdomTree, Canary Capital, CoinShares, and Grayscale are all vying for a piece of the pie, with Cboe potentially serving as the launchpad. Bloomberg senior ETF analyst Eric Balchunas has even suggested that altcoin ETF approvals are not a matter of "if," but "when."