Following Ripple's legal win against the U.S. Securities and Exchange Commission (SEC) and a more stable cryptocurrency market, XRP is experiencing a resurgence. In tandem with this positive momentum, Grayscale has relaunched its XRP Trust, prompting speculation about the potential launch of an XRP spot ETF in the future.
Grayscale, a leading asset manager, announced the relaunch of its XRP Trust on September 12, 2024. This financial product allows investors to gain exposure to XRP without having to directly hold the cryptocurrency. The trust’s value is closely tied to the market price of XRP, minus management fees and other expenses. This move further cements the integration of cryptocurrencies into the traditional financial world, although it might disillusion early crypto enthusiasts who view the space as fundamentally anti-establishment.
Grayscale's Renewed Bet on XRP Trust
Grayscale previously launched an XRP trust but was forced to suspend it in 2021 due to the legal battle between Ripple and the SEC. With that litigation now resolved, Grayscale has decided to reintroduce the trust. Trusts, unlike ETFs, are not traded on public exchanges and typically face less stringent regulatory requirements. Many cryptocurrency trusts are merely registered with the SEC, while ETFs must adhere to a far stricter regulatory framework.
XRP Price Surges
XRP's price has skyrocketed following Ripple's legal victory against the SEC. Over the past week, XRP has risen by 10%, reaching a value of $0.5684. This price increase may also be partly driven by Ripple’s announcement of its new stablecoin, RLUSD, which is currently in testing with its commercial partners.
Speculation Over XRP Spot ETF
The approval of the first Bitcoin spot ETFs in January 2024 marked a significant moment for the cryptocurrency industry, attracting billions of dollars in investments. After years of delays and regulatory hurdles, the success of Bitcoin ETFs has set the stage for more crypto ETFs to follow. The recent launch of the first Ethereum spot ETF, though slightly underwhelming in terms of performance, indicates that the market is still open to further ETF expansion.
Solana (SOL) and XRP are now seen as the next likely candidates for spot ETFs. Grayscale’s XRP Trust could be a step toward such a development, although the relationship between a trust and a spot ETF is not guaranteed. The performance of Grayscale’s Bitcoin Trust, which was converted into an ETF earlier this year, has not met expectations, causing some skepticism about whether an XRP ETF would fare better.
Ripple Labs, the company behind XRP, has long been at odds with the SEC, using various channels to criticize the regulatory body. Now that the legal disputes have been resolved, XRP is considered legally compliant, which has fueled speculation about the possibility of an XRP spot ETF. However, prominent figures like Blackrock CEO Larry Fink and Ripple CEO Brad Garlinghouse have remained silent on the matter. It remains to be seen whether Solana or XRP will be the first to launch their respective ETFs.
Blackrock’s Role as a Leader in Bitcoin ETFs
The approval of the Bitcoin spot ETF in the U.S. came after years of legal battles between asset managers and the SEC. The game changed when Blackrock, the world’s largest asset manager, joined the race, and the SEC lost a legal case against Grayscale over its attempt to convert its Bitcoin trust into an ETF. ETFs have since become instrumental in advancing the institutional acceptance of cryptocurrencies as legitimate investment vehicles.
Now that Ripple's legal troubles with the SEC are behind it, XRP is poised to be recognized as a fully compliant cryptocurrency. This has strengthened the likelihood of an XRP spot ETF being introduced, though the timeline remains uncertain.
Other Investment Opportunities Amid Financial Market Uncertainty
Despite XRP’s recent price surge, its future trajectory remains uncertain until the financial landscape becomes clearer. Investors looking to diversify their portfolios may explore other investment options to mitigate risk and seize new opportunities while the crypto space continues to evolve.