Grayscale Investments has formally submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to convert its existing XRP Trust into a spot exchange-traded fund (ETF). The proposed ETF is intended to be listed on the New York Stock Exchange (NYSE) Arca platform.
This initiative is part of a wider trend among asset management firms seeking to create regulated, accessible investment products for digital assets. Converting the trust into an ETF structure is designed to offer investors a more familiar and efficient way to gain exposure to XRP's price movements.
Details of the Proposed XRP ETF
The Grayscale XRP Trust currently holds assets valued at approximately $16.1 million. A successful conversion would transition this product into a fully-fledged ETF. The fund's objective is to track the market price of XRP, with its daily performance reflecting the asset's value minus the fund's operational and management fees.
To ensure security and regulatory compliance, the underlying XRP assets for the trust are held in cold storage by Coinbase Custody Trust Company, a qualified custodian. Grayscale emphasizes that listing the product on a national securities exchange like NYSE Arca would provide enhanced investor protections and oversight.
Broader Context and Institutional Interest
Grayscale's application is not an isolated case. It reflects a growing institutional push for diversified cryptocurrency investment vehicles. Following the landmark approval of spot Bitcoin ETFs, asset managers are now actively seeking similar products for other major digital assets.
Other prominent financial firms, including CoinShares and Bitwise, have also filed applications for their own XRP-focused ETFs. This surge in applications underscores the rising institutional demand for structured and regulated products tied to altcoins. XRP, with a market capitalization of nearly $180 billion, remains one of the largest cryptocurrencies, though its price remains below its all-time high of $3.40.
This move aligns with Grayscale's broader strategy to expand its suite of digital asset products. The company has recently applied for ETFs based on Solana (SOL) and Litecoin (LTC) and has already launched a Bitcoin Miners ETF (ticker: MNRS), which provides exposure to companies in the Bitcoin mining industry.
Potential Impact and Significance
The SEC’s decision on this application is highly anticipated, as it could establish a critical precedent for the entire cryptocurrency market. An approval would signal a willingness to regulate and embrace investment products for digital assets beyond Bitcoin, potentially paving the way for a new wave of altcoin ETFs.
A spot XRP ETF would likely make the asset more attractive to a broader range of investors. The ETF structure offers advantages like easier trading through traditional brokerage accounts, improved liquidity, and the perceived safety of being listed on a major, regulated exchange. For a comprehensive look at how leading platforms handle digital assets, you can explore advanced trading and investment tools.
The outcome will be closely watched by investors, regulators, and other asset managers as a key indicator of the future of cryptocurrency integration within conventional financial frameworks.
Frequently Asked Questions
What is the difference between the current XRP Trust and the proposed ETF?
The current trust is a closed-end fund that often trades at a premium or discount to its net asset value (NAV). Converting to an ETF would create a product that allows for creation and redemption mechanisms, which typically keep the market price closely aligned with the NAV, providing a more efficient and accurate investment vehicle.
Why is the SEC’s decision on this application so important?
The SEC's ruling will set a significant precedent. Approving a spot XRP ETF would indicate regulatory openness to a wider array of cryptocurrency-based investment products, potentially leading to more altcoin ETFs and further legitimizing the asset class for institutional investors.
Who holds the XRP for the Grayscale Trust?
The underlying XRP assets are held in secure cold storage by Coinbase Custody Trust Company, a regulated and qualified custodian. This arrangement is designed to ensure the safety and security of the fund's holdings.
How does an ETF make investing in XRP easier?
An ETF trades on a traditional stock exchange like any other stock. This allows investors to buy and sell shares easily through their existing brokerage accounts without the need to manage private keys or use cryptocurrency exchanges, simplifying the investment process.
Are other companies trying to launch an XRP ETF?
Yes, other major asset management firms, including Bitwise and CoinShares, have also filed applications with the SEC to launch their own spot XRP ETFs, highlighting the competitive and institutional interest in this product.
What was Grayscale's recent Bitcoin Miners ETF?
In January 2025, Grayscale launched the Grayscale Bitcoin Miners ETF (MNRS). This product does not hold Bitcoin directly but instead invests in a portfolio of publicly traded companies focused on Bitcoin mining, offering a different type of exposure to the crypto ecosystem. To understand the variety of investment options available, view real-time market data and analysis.