The U.S. Securities and Exchange Commission (SEC) has once again postponed its decision on Grayscale’s XRP exchange-traded fund (ETF) application, citing the need for additional time to assess its approval. The delay follows a wave of interest from institutional investors in launching spot XRP ETFs, with Franklin Templeton being the latest major asset manager to submit an application.

SEC Extends Decision Window Until October

The SEC's recent notice explains that it requires "a longer period" to evaluate Grayscale’s proposal, which could push the final decision deadline to mid-October. Initially, the SEC had 45 days to review the application but has the authority to extend the period up to 240 days. The next key milestone for Grayscale’s application falls on May 21, when another decision or delay may be announced.

This move mirrors previous SEC strategies regarding crypto ETFs. Historically, the regulator has exercised caution when approving new crypto investment products, aiming to ensure investor protection and market stability.

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Source: SEC

Franklin Templeton's recent application underscores the increasing demand for XRP ETFs. The investment giant joins other applicants such as Canary Capital, WisdomTree, Bitwise, CoinShares, and 21Shares. The surge in applications signals a strong institutional push to integrate XRP into traditional investment vehicles, similar to the rapid adoption of Bitcoin ETFs.

Why XRP ETFs Are Gaining Traction

The interest in spot XRP ETFs stems from the growing appetite for regulated exposure to cryptocurrencies. Following the record-breaking launch of Bitcoin ETFs, which collectively manage nearly $100 billion in assets, financial institutions see an opportunity to cater to investors looking beyond Bitcoin.

Ripple Labs CEO Brad Garlinghouse has been vocal about the inevitability of an XRP ETF, citing high demand from both retail and institutional investors. Despite the ongoing regulatory scrutiny surrounding Ripple and XRP, the crypto asset remains among the top five cryptocurrencies by market capitalization.

XRP's price has seen a notable uptick, recently climbing to $2.19, a 9% increase according to CoinGecko. While still below its $3.38 post-election high, XRP has demonstrated resilience compared to Bitcoin and Ethereum.

Market analysts attribute XRP’s price stability in part to the re-election of U.S. President Donald Trump, which many in the crypto space see as a positive shift in regulatory policy. Under former SEC Chair Gary Gensler, the agency aggressively pursued lawsuits against crypto firms, including Ripple Labs. However, recent regulatory changes suggest a potential softening of the SEC’s stance on digital assets.

Despite the SEC’s delay, analysts remain optimistic about the eventual approval of XRP ETFs. Bloomberg ETF expert James Seyffart noted that such postponements are "standard procedure" and do not necessarily indicate a rejection. The final decision deadline in October remains the most significant milestone for XRP ETF hopefuls.

The broader market sentiment toward crypto ETFs appears bullish, with Ethereum staking and in-kind redemption ETFs also awaiting SEC approval. As regulatory landscapes evolve, the coming months will be crucial for XRP investors and firms pushing for its mainstream adoption through ETFs.

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