XRP ETF: Jupiter Backtracks on Bet Over Compliance Woes

Jupiter, a prominent investment firm, recently made waves in cryptocurrency by announcing plans for an Exchange-Traded Product (ETP) focused on XRP, the digital asset associated with Ripple Labs. However, as reported by the Financial Times, Jupiter’s ambitious venture hit a roadblock as they backtracked on their initial bet due to compliance concerns.

The decision to launch an XRP ETP initially seems like a bold move, considering the regulatory uncertainties surrounding Ripple and its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC). Despite these challenges, Jupiter expressed confidence in XRP’s potential and believed that an ETF could provide investors with a regulated avenue to gain exposure to the digital asset.

Jupiter Reassessed its Position on XRP ETP

However, just as quickly as the announcement was made, Jupiter found itself reassessing its position. Jupiter’s Ireland-based Gold & Silver fund purchased $2.57 million in 21Shares’ Ripple XRP ETP in 2023. Following the purchase, the investment was detected by the firm’s regular oversight process, after which the holding was canceled. 

Although the company sold the cryptocurrency ETP holding for $2,570,670, at a loss of $834, there was no regulatory intervention or impact on the fund. Notably, the cancellation is because Irish authorities do not allow crypto exposure in funds governed under UCITS (Undertakings for the Collective Investment in Transferable Securities). 

Institutions and Investors are Affected by the Regulatory Compliance

Meanwhile, Jupiter’s Gold & Silver had held crypto before the Irish government announced its stance against investments. 

Jupiter’s decision to backtrack on its XRP ETF plans underscores the complexities of navigating the regulatory landscape in the cryptocurrency space. While digital assets like Ethereum (ETH) and Bitcoin (BTC) have gained mainstream acceptance, others, like XRP, continue to face regulatory scrutiny.

This uncertainty not only affects individual investors but also institutions looking to innovate within the burgeoning cryptocurrency market.

Spot Bitcoin ETFs vs Prospects for ETF and XRP

The emergence of spot Bitcoin ETFs in the United States has sparked significant interest and speculation in the cryptocurrency community. However, the situation becomes more subtle when considering other major cryptocurrencies like Ethereum and XRP.

The regulatory landscape for cryptocurrency ETFs is a pivotal factor influencing market sentiment and the trajectory of specific cryptocurrencies. Investors and market observers closely watch regulatory developments, as they hold the potential to either propel or hinder the adoption of these financial instruments.