Grayscale Investments has launched a new XRP trust that allows investors to gain exposure to cryptocurrency without directly owning it.
This new product could possibly evolve into a full-fledged ETF soon.
This is given XRP's real-world utility and market adoption, as well as more trad-fi utility over assets like Solana.
Grayscale also established a four-stage product life cycle for the new offering, which demonstrates its commitment to obtaining ETF approval soon.
Grayscale Investments, one of the largest asset management firms in the world, has once again made headlines in the crypto space.
The firm just launched a new Grayscale XRP Trust, the latest addition to its lineup of crypto-related services, such as spot Bitcoin and Ethereum ETFs.
This new XRP product will allow accredited investors to gain exposure to the cryptocurrency without having to buy it directly, similar to a spot ETF.
Moreover, this new product serves as a stepping stone to an actual XRP ETF.
Here’s everything you need to know about the new XRP trust, the possibility of a spot ETF for the cryptocurrency soon, and the core differences between both.
Grayscale made the announcement on 12 September, stating that the investment option is now open for daily subscription to qualified individual and institutional investors.
According to the announcement, this one focuses solely on Ripple's $XRP, like the company’s other single-asset products.
This means that just like the Bitcoin and Ethereum spot ETFs the firm released in early and mid-2024, investors can gain exposure to XRP without buying or holding the cryptocurrency itself.
This makes Ripple's core offering even more attractive to investors looking to diversify their investments without the hassle of buying tokens directly.
Grayscale's new offering sounds a lot like an ETF—however, a crypto trust and an exchange-traded fund are two very different things.
However, despite their differences, a crypto trust has a lot of potential to evolve into an ETF.
The new XRP trust
For starters, according to a report from FOX Business, the establishment of the XRP trust could lay the groundwork for a possible XRP ETF over other cryptocurrencies like Solana or even Cardano.
However, the only difference is that an ETF would require a lot more regulatory filtering from the SEC.
Keep in mind that the XRP Trust, as explained in the previous section, is only available to "accredited" investors and companies.
An ETF, on the other hand, would be available to the general public and, as such, would have to pass several more regulatory tests—a process that can take months or even years, with setbacks upon setbacks.
In essence, we have much better chances of seeing an XRP ETF, but there are still no guarantees.
The company has also expressed interest in upgrading the trust into an ETF, as seen in its four-stage life cycle plan for the product.
According to the firm's FAQ page, the new XRP trust will follow a “phased approach” and will ultimately be "uplisted to an ETF."
The main goal is to push the new offering through each stage while improving investor access and transparency.
Eventually, if things go well, the trust could eventually lead to a fully-fledged ETF.
One core reason for the excitement surrounding an ETF for XRP rather than Solana is the XRPL's real-world utility.
Unlike most other cryptocurrencies, which are mostly valued based on investment potential and staking (a feature currently banned with the Ethereum ETFs), XRP takes things a step further.
Cryptocurrency is not only a valid store of value; it was also made with a lot of real-world utility in terms of cross-border payments.
XRP offers a cheaper and less tedious advantage to investors looking to move funds from one country to another over platforms like Western Union, PayPal and traditional banking systems.
These factors alone make the cryptocurrency highly poised to receive the next spot ETF listing in terms of use case and market adoption.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.