Ripple (XRP) surged on Thursday morning, driven by a significant development from a well-known fund manager in the cryptocurrency space. The XRP token gained as much as 6.5% in early trading, settling at a 4.4% increase by midday. This upward movement followed Grayscale's announcement of a new mutual fund dedicated to XRP holdings.
Grayscale’s Role in Crypto Fund Development
Grayscale, a pioneer in cryptocurrency-focused investment vehicles, has launched the Grayscale XRP Trust. Currently available only to accredited investors, the fund is expected to expand to retail investors in the future. Grayscale’s track record includes converting its Bitcoin Trust (2015) and Ethereum Trust (2018) into ETFs in 2024 after regulatory approval.
The XRP Trust follows Grayscale’s established lifecycle:
- Limited initial availability
- Gradual public access
- SEC reporting
- ETF conversion
This structured approach enhances XRP’s accessibility, justifying the positive market response.
Challenges and Considerations
Despite progress, the Grayscale XRP Trust faces hurdles:
- Slow evolution: The Grayscale Solana Trust has stagnated for over a year without advancing to SEC reporting.
- High fees: Annual expense ratios of 2.5% for XRP and Ethereum funds dwarf the 0.25% average for Bitcoin/ETH ETFs.
Grayscale’s efforts lay groundwork for future XRP ETFs but come at a cost. Investors may prefer direct XRP exposure or await lower-fee alternatives.
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FAQ Section
Q: Why did XRP’s price rise today?
A: Grayscale’s announcement of an XRP-focused trust increased investor confidence.
Q: When will the XRP Trust be available to retail investors?
A: No fixed timeline, but Grayscale typically expands access incrementally.
Q: Are Grayscale’s fees competitive?
A: No—their 2.5% expense ratio is significantly higher than industry averages.
Q: Should I invest in the Grayscale XRP Trust now?
A: Accredited investors can access it, but retail investors might wait for lower-fee options.
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Disclosure: The author holds positions in XRP and Grayscale Bitcoin Trust. This content is for informational purposes only.
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