By Frank Martin (MoneyAmped.com)
Leading asset manager Grayscale has collaborated with NYSE Arca to file for an application with the US Securities and Exchange Commission (SEC) that would see the firm’s XRP Trust converted into an ETF.
If the SEC gives the green, Coinbase Custody Trust will be the custodian of the purchased XRP, while BNY Mellon Asset Servicing will serve as the ETF’s transfer agent.
The Grayscale XRP Trust is among the many investment vehicles the company has decided to convert to ETFs amid rising demand for these crypto-based investment products. In 2024, Grayscale converted its Ethereum Trust and Bitcoin Trust into spot ETFs. In addition, the asset manager is seeking the SEC’s approval to turn its Digital Large Cap Fund, which holds XRP, Solana, Ethereum, Cardano, and Bitcoin, into an ETF.
Why Are Companies Like Grayscale Filing for Crypto-Based ETFs?
Asset managers are rushing to receive approval for their crypto-based exchange-traded funds after Republican Donald Trump returned to the Oval. The US president has promised to provide regulatory clarity in an effort to make America the world’s crypto capital. This promise has boosted investor confidence, thus increasing demand for crypto investment products like ETFs.
Understanding the Grayscale XRP Trust
According to Grayscale’s filings, the firm’s XRP Trust has $16.2 million in assets under management (AUM). The shares of this investment product are held by US investors who want exposure to the XRP ecosystem without holding the token directly.
Like other trusts, the number of Grayscale’s XRP Trust shares is fixed. By comparison, ETFs are allowed to generate more shares to meet demand for the investment product, making them ideal for cryptocurrencies like XRP, which have seen a rising demand in recent months.
More Asset Managers File for XRP Spot ETF
Grayscale isn’t the only company looking to offer an XRP spot ETF in the United States. Several other asset managers, including Canary Capital, 21 Shares, and Rex Shares have filed their applications with the SEC.
These fillings have had a positive impact on XRP’s price, according to data from CoinGecko. The crypto asset saw a 27% surge in January, almost hitting a new all-time high that month.
