Canary Capital Finalizes XRP ETF Launch Amid Government Shutdown Uncertainty
Canary Capital, a prominent asset management firm in the digital finance space, is on the cusp of launching its highly anticipated XRP Exchange-Traded Fund (ETF). The firm has officially filed Form 8-A with the U.S. Securities and Exchange Commission (SEC), marking the final regulatory hurdle before the ETF becomes publicly tradable. This milestone allows Canary to list its XRP ETF shares on the Nasdaq, signaling a significant step forward for XRP-based investment products in the U.S. market.
This approval comes at a time when the broader crypto ETF landscape in the United States is still navigating regulatory bottlenecks due to the ongoing government shutdown. The shutdown has effectively stalled the SEC’s ability to process and approve other crypto ETF applications, leaving several major players—including Bitwise and Grayscale—waiting in line. However, Canary Capital has strategically circumvented this hurdle by removing the delay clause from its S-1 registration, enabling an automatic approval process that doesn’t hinge on active SEC intervention.
According to financial journalist Eleanor Terrett, the ETF is expected to officially launch as early as tomorrow, making it the first XRP ETF under the Securities Act of 1933. This classification allows the fund to offer 10% spot exposure to XRP, giving investors an opportunity to gain direct access to the cryptocurrency through a regulated financial instrument—an unprecedented move in the U.S. market.
This milestone also reflects a deeper transformation in the regulatory landscape. Just over a year ago, the SEC had appealed a court ruling that determined XRP did not qualify as a security under existing financial laws. That decision was seen as a major legal win for Ripple Labs, the company behind XRP, and played a pivotal role in opening the door to compliant investment products like Canary’s ETF.
Crypto market analyst Nate Geraci emphasized the significance of this development, stating that the launch represents a dramatic shift in how digital assets are perceived by U.S. regulators. He noted that the industry has evolved substantially in a short period, moving from legal ambiguity to institutional acceptance. Geraci also pointed to the strong performance of CME XRP futures contracts and XRP-focused futures ETFs as indicators that investor appetite for spot-based XRP products remains high.
Steven McClurg, CEO of Canary Capital, shared an optimistic outlook, forecasting that the ETF could attract up to $10 billion in inflows within its first month of trading. This projection underscores the growing investor demand for regulated cryptocurrency investment vehicles, especially among institutional players seeking diversified exposure to the digital asset class.
While Canary Capital has managed to forge ahead, the fate of other crypto ETFs still hangs in the balance. Bitwise and Grayscale have also updated their S-1 filings to remove delay amendments, suggesting that they too could move forward once the government shutdown concludes. With expectations that the shutdown will end later this week, the SEC could resume its approval process as early as next week, potentially ushering in a wave of new crypto ETF launches.
Meanwhile, market conditions remain volatile. At the time of writing, XRP is trading at approximately $2.39, representing a 4% decrease over the past 24 hours. Despite the price dip, the long-term sentiment surrounding XRP appears bullish, especially in light of its increasing institutional adoption and favorable regulatory progress.
What Makes the Canary XRP ETF Unique?
Unlike traditional crypto ETFs that rely on futures or derivatives contracts, the Canary XRP ETF is structured to offer direct spot exposure. This means the fund will hold actual XRP tokens, tracking their real-time market value. For investors, this translates into a more transparent and potentially less volatile investment option, as futures-based ETFs often carry additional costs and risks linked to contract rollovers.
Moreover, as the first ETF of its kind for XRP under the ’33 Act, Canary’s fund sets a legal precedent. It opens the door for similar spot ETFs involving other altcoins—assuming they can meet the same regulatory standards. If successful, this launch could serve as a roadmap for future spot ETFs covering cryptocurrencies like Cardano (ADA), Solana (SOL), or even meme coins with growing user bases.
Institutional Interest in XRP Continues to Grow
The launch of the ETF is not happening in a vacuum. Over the past six months, institutional interest in XRP has been steadily growing. Large-scale purchases and wallet accumulations have been reported, with some estimates suggesting that institutional investors now hold over $1 billion worth of XRP. This trend reflects a broader shift in perception, as more financial institutions begin to view XRP not just as a speculative asset, but as a viable component of a balanced digital asset portfolio.
How the Government Shutdown Impacts Crypto Regulation
The U.S. government shutdown, while temporary, has exposed vulnerabilities in the current system for approving financial products. With the SEC operating at limited capacity, critical decisions on crypto ETFs have been delayed, stalling innovation and causing uncertainty for both issuers and investors. Canary’s workaround—removing the delay clause to trigger auto-approval—illustrates how agile firms can adapt to bureaucratic slowdowns.
However, this also raises questions about the need for more resilient and transparent regulatory processes that can function even during political disruptions. As cryptocurrencies continue to gain mainstream traction, the ability of regulators to keep pace will be crucial in determining whether the U.S. remains a competitive hub for digital asset innovation.
Looking Ahead: What’s Next for XRP and Crypto ETFs
As Canary’s ETF goes live, the spotlight will shift to market reaction and fund performance. Strong inflows could validate the strategy and encourage other firms to follow suit. On the flip side, tepid interest might prompt a reevaluation of the demand for single-asset crypto ETFs.
In the broader picture, successful launches of crypto spot ETFs could pave the way for more diversified offerings, such as index-based crypto ETFs or sector-specific funds focusing on DeFi, NFTs, or Layer-2 networks. Each successful launch represents a step toward integrating crypto into the traditional financial system.
In summary, Canary Capital’s XRP ETF is not just a milestone for the company, but a pivotal moment in the evolution of crypto investment in the United States. With regulatory structures slowly adapting and investor interest remaining strong, the launch could mark the beginning of a new era for digital asset funds—one where innovation and compliance go hand in hand.