Bitwise Files for XRP ETF Amid SEC Appeal, Adding to Regulatory Uncertainty
Bitwise, an asset manager, filed an S-1 form for an ETF to invest in XRP with the U.S. Securities and Exchange Commission (SEC) on Monday. However, Bitwise’s ETF registration is clouded by increased regulatory uncertainty, weighing down the price of cryptocurrencies. XRP’s options market indicates a greater likelihood of an extended price decrease than resumed gains.
The SEC promptly filed a notice of appeal to the Second Circuit Court of Appeals in response to Bitwise’s action, much to the dismay of XRP bulls. This was an attempt to overturn Judge Analisa Torres’s two-month-old decision that the fintech company Ripple Labs had not violated securities laws through programmatic sales to retail exchanges.
XRP Drops 14% as SEC Lawsuit Pressures Market, Options Traders Turn Bearish
The SEC accused Ripple of selling unregistered securities four years ago after the firm traded XRP for $1.3 billion. Being labeled as a security is often viewed as a negative development in the cryptocurrency market since securities are subject to stricter regulations than commodities and require more reporting and openness from businesses. In light of this, XRP has lost more than 12.18% of its value this week after falling 14.05% to 51 cents on the last day, as per data providers CoinMarketCap. Among the top 100 cryptocurrencies by market value, it is the third least-performing coin.
On the other hand, based on the difference between call and put volatility (demand), or the seven-day call-put skew, options traders on Deribit appear to be comparatively more negative on XRP than on bitcoin and ether. XRP’s seven-day skew, which indicates a bias in favor of options that protect against price declines, was -3.2% at the time of publication.
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