Grayscale Opens XRP Trust Trading, 21Shares Applies for ETF

By admin On Nov 2, 2024

Two prominent ETF issuers advanced their XRP-based asset initiatives today. Grayscale launched trading on its XRP Trust fund, while 21Shares submitted an official application for an XRP ETF.

While Grayscale’s Trust fund holds potential for eventual conversion into an ETF, its long-term customer appeal remains uncertain.

The XRP ETF Race

Grayscale announced that its XRP Trust is now open to eligible accredited investors. Launched two months ago, this trust is seen as a possible precursor to an ETF. Grayscale previously converted its Bitcoin trust into an ETF after securing regulatory approval and is currently working to convert another fund into an ETF.

“Grayscale XRP Trust (the “Trust”) is one of the first securities solely invested in and deriving value from the price of XRP… avoiding the challenges of buying, storing, and safekeeping XRP directly. Shares of the Trust are designed to track the XRP market price,” the company claimed on its website.

The possibility of an XRP ETF is growing in the crypto space. Ripple’s CEO called eventual regulatory approval “inevitable”, and several firms have already filed their own petitions. Grayscale’s non-ETF trust strategy has been reliable in the past, allowing for early profits. However, this looser structure also has downsides: the XRP Trust’s price actually declined when trading began.

Grayscale XRP Trust Price Drops. Source: Grayscale

Although Grayscale’s Bitcoin Trust (GBTC) was an early leader in the ETF market, it quickly lost ground to younger competitors. The company even went so far as to launch a second Bitcoin-based ETF, attempting to recover this market share. Grayscale’s pre-ETF trust fund strategy may allow early market access, but its customers may abandon it for a dedicated ETF product.

If the SEC does approve an XRP ETF in the near future, Grayscale will have plenty of competitors. According to filed documents, investment firm 21Shares is also entering the race. 21Shares is already a Bitcoin ETF issuer and has also petitioned for a Solana ETF. The race is heating up, and it could transform the face of Ripple.

Ultimately, the SEC has been very quiet about the likelihood of approving these products. Once the Commission officially begins confirming or rejecting these applications, they’re locked into a series of deadlines. In other words, they will either have to move the efforts along or explicitly block them. For now, this ambiguity is still sustainable, and it doesn’t show signs of moving.

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