Canada Launches First North American Spot XRP ETF as U.S. Regulators Near Decision

North America's First Spot XRP ETF Debuts as U.S. Decision Looms

Purpose Investments' Canadian launch creates institutional-grade pricing benchmark while traders position for potential U.S. approval

Purpose Investments will launch North America's first spot-based XRP exchange-traded fund this Wednesday on the Toronto Stock Exchange, just as U.S. regulators face a critical decision deadline on similar products that could dramatically reshape market dynamics for the world's fifth-largest digital asset.

The Purpose XRP ETF (ticker: XRPP) will begin trading June 18th in Canadian dollar-hedged, unhedged, and U.S. dollar units, providing direct exposure to XRP through a regulated investment vehicle. The product's arrival coincides with Franklin Templeton's looming June 17th SEC decision deadline—the first in a series of regulatory verdicts expected throughout 2025 for U.S. spot XRP ETF applications.

A Small Market's Outsized Influence

While Canada represents just 3% of global ETF assets, market participants view the Toronto listing as disproportionately significant for creating an institutional-quality reference price for spot XRP.

"The Canadian product instantly becomes the highest-quality pricing benchmark for spot XRP in regulated markets," said a veteran ETF strategist at a global investment bank who requested anonymity because they aren't authorized to comment publicly. "Even before potential U.S. approvals, XRPP will enable sophisticated cross-border trading strategies between spot holdings and CME futures contracts."

Purpose Investments has experience pioneering crypto ETFs, having launched the world's first spot Bitcoin ETF in 2021. Their entry into XRP markets follows the Ontario Securities Commission's final regulatory approval, reinforcing Canada's leadership in regulated digital asset investment products.

The timing is particularly noteworthy as it comes just one month after CME Group began offering regulated XRP futures contracts on May 19th, providing another significant step toward institutional access.

The Race for America's First Spot XRP ETF

Despite popular misconception, no spot XRP ETF yet exists in the United States. While Hashdex launched the first global spot XRP ETF in Brazil on April 25th (ticker: XRPH11), and two derivative-based XRP products now trade on U.S. exchanges, the true prize—direct spot exposure through a U.S.-listed ETF—remains unclaimed.

The existing U.S. products include Teucrium's 2x Leveraged XRP ETF, launched April 8th as the first XRP ETF in America, which targets short-term traders with double the daily performance exposure at a 1.85% management fee. Volatility Shares followed on May 22nd with the first 1:1 XRP futures ETF on Nasdaq, based on CME XRP futures contracts.

But the regulatory spotlight now falls on applications from major asset managers including Franklin Templeton, WisdomTree, Bitwise, Grayscale, and 21Shares, all competing to launch the first U.S. spot XRP ETF. Market prediction platforms currently estimate an 85-90% probability of approval before year-end.

"The SEC's green light for CME XRP futures in May effectively removed the 'futures first' hurdle previously cited in Bitcoin and Ether approvals," explained a regulatory specialist at a digital asset investment firm. "That, combined with the March settlement between the SEC and Ripple, creates a substantively different landscape than what existed even six months ago."

Potential Market Impact: Beyond the Price Surge

XRP's price has already reacted to the evolving ETF landscape, surging nearly 7% following the Purpose ETF announcement, outperforming major crypto indices. But seasoned observers suggest the more profound impacts lie ahead.

Unlike the highly liquid Bitcoin market, where spot ETF approvals were absorbed without dramatic price dislocations, XRP's thinner liquidity creates unique dynamics. The CME XRP futures market, while growing rapidly from $19 million in first-day volume to low-$50 million range currently, remains relatively shallow compared to XRP's $4.3 billion daily spot exchange volume.

"Until CME open interest exceeds roughly $500 million, the arbitrage loop cannot fully neutralize primary-market demand," noted a quantitative trading director at a crypto-focused hedge fund. "Early ETF creations will likely trigger outright spot purchases, potentially lifting XRP prices disproportionately compared to previous crypto ETF launches."

A Calibrated Trade Implementation Strategy

For professional traders and investors eyeing this evolving opportunity, market structure and liquidity constraints demand nuanced approaches.

Pre-decision positioning options include establishing long CME XRP futures positions against short baskets of high-beta alternative cryptocurrencies to isolate the approval catalyst, or purchasing the Canadian XRPP on its first trading day while hedging delta with CME shorts to capture potential net asset value premiums.

If approval materializes, execution quality becomes paramount amid expected volatility. "Expect greater than five-standard-deviation intraday moves," warned a derivatives strategist at a proprietary trading firm. "OTC desks will likely widen XRP spreads significantly, degrading algorithmic execution quality—front-loading larger positions before the market open may prove advantageous."

Measuring Success: Flow Potential and Price Trajectories

Looking at previous crypto ETF precedents provides a useful benchmark for XRP's potential. U.S. spot Bitcoin ETFs have absorbed over $110 billion in assets under management (approximately 9% of circulating Bitcoin) within 15 months of approval, while spot Ether ETFs approved in March 2025 have attracted $18 billion (roughly 6% of available supply).

Applying similar adoption curves to XRP suggests first-year U.S. spot ETF assets under management could reach $12-20 billion, representing 15-25% of effective float after accounting for Ripple treasury and escrow holdings. This implies potential price appreciation of 18-30% from current levels, according to analysts' models.

However, residual risks remain. Despite the March 2025 SEC-Ripple settlement ($50 million civil penalty with no admission of wrongdoing), final court approval on institutional sales remedies remains pending. Additionally, legislative uncertainty surrounding the FIT21 bill, which has cleared the House but not the Senate, could create custody and segregation rule ambiguities for alternative cryptocurrency ETFs.

For investors constructing portfolios around this emerging opportunity, strategists suggest a measured approach—allocating 1-1.5% of diversified alternative investment sleeves to spot or fund units, with tactical overlays via CME futures to manage beta exposure.

The base case price target among consensus estimates centers around $3.10 by Q1 2026 (current price approximately $2.30), with bullish scenarios extending to $5.00 if assets under management exceed $25 billion and Ripple successfully executes its stablecoin issuance roadmap.

As one veteran crypto portfolio manager summarized: "The Canadian launch is merely the dress rehearsal—the main event begins with tomorrow's SEC decision window."

Disclaimer: This analysis represents informed perspectives based on current market data and historical patterns. Past performance does not guarantee future results. Readers should consult financial advisors for personalized investment guidance.