Is Grayscale’s Ripple Trust the Way Toward a Spot XRP ETF in the US?
The prominent cryptocurrency asset manager said on Thursday that it has launched a new Trust that will track the performance of Ripple’s native token (XRP).
Given its history of converting other Trusts (BTC and ETH) into spot ETFs, the question arises about whether the new product will put Ripple on the fast track toward an exchange-traded fund of its own.
XRP ETF Coming Soon?
The effects for XRP were immediate as its price soared from under $0.54 to a multi-week peak of almost $0.59 in minutes after Grayscale broke the news. After a minor retracement, XRP stands tall at $0.58 and is over 10% up within the past week. Additionally, past fake news examples have shown that an ETF announcement could have a massive impact on its price movements.
The company’s execs, including CEO Brad Garlinghouse, have been quite adamant that XRP will inevitably see its own exchange-traded fund. Their comments came despite Ripple’s legal battle in the US against the same agency that approves or rejects ETFs.
However, that legal spat with the SEC is nearing its end after a US judge imposed a fine of $125 million for Ripple, which was seen as a major win for the industry since the agency initially sought billions.
Grayscale’s history also shows some promising signs. The company once had the two largest private funds tracking BTC and ETF, both of which were converted into spot ETFs this year.
Consequently, the potential finale of the SEC vs Ripple lawsuit and Grayscale’s history could turn out to be the easiest pathway for a spot XRP ETF, especially if there is a big change in the US political scene.
XRP’s Benefits
Commenting on the Grayscale’s Ripple Trust launch, Ryan Lee, Chief Analyst at Bitget Research, told CryptoPotato that the move will “undoubtedly” boost market confidence in XRP. This is because Grayscale’s products attract mostly institutional investors as they can invest in a regulated product. Lee listed numerous benefits for XRP from the Grayscale engagement:
Capital Inflow: The introduction of a trust product will attract more institutional capital, increasing XRP’s market value and driving price growth.
Market Confidence: The existence of a Grayscale Trust proves the reliability of XRP as an investment product, boosting confidence among market participants.
Increased Liquidity: With the establishment of the trust, XRP’s market liquidity will improve, which may lead to higher trading volumes and more price stability.
Compliance and Transparency: The launch of the trust indicates greater regulatory compliance, which is a positive signal for the legitimacy and market acceptance of XRP.
On the XRP ETF front, Lee noted that there is no clear timeline yet. However, he asserted that “Grayscale’s trust products are often seen as precursors to ETFs.”
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