Is Grayscale’s Ripple Trust the way to a one-time XRP ETF in the US?

The prominent cryptocurrency asset manager said on Thursday that it has launched a new Trust that will track the performance of Ripple’s native token (XRP).

Given its track record of converting other trusts (BTC and ETH) into spot ETFs, the question arises whether the new product will put Ripple on the fast track to its own exchange-traded fund.

XRP ETF Coming Soon?

The effects for XRP were immediate, as its price surged from less than $0.54 to a multi-week high of nearly $0.59 in minutes after Grayscale broke the news. After a minor pullback, XRP remains at $0.58 and is up more than 10% over the past week. Also, past examples of fake news have shown that an ETF announcement could have a massive impact on its price movements.

The company’s executives, including CEO Brad Garlinghouse, have been pretty adamant that XRP will inevitably see its own exchange-traded fund. His comments came despite Ripple’s legal battle in the US against the same agency that approves or rejects ETFs.

However, this legal dispute with the SEC is coming to an end after a US judge imposed a $125 million fine on Ripple, which was seen as a major victory for the industry since the agency initially sought billions.

Grayscale’s story also shows some promising signs. The firm once had the two largest private funds tracking BTC and ETFs, both of which became spot ETFs this year.

Consequently, the potential end of the SEC vs Ripple lawsuit and the Grayscale story could prove to be the easiest route for a one-time XRP ETF, especially if there is a big shift in the US political scene.

Benefits of XRP

Commenting on the launch of Grayscale’s Ripple Trust, Ryan Lee, chief analyst at Bitget Research, told CryptoPotato that the move will “certainly” boost market confidence in XRP. This is because Grayscale products mostly attract institutional investors as they can invest in a regulated product. Lee listed numerous advantages for XRP of the grayscale compromise:

Capital Inflow: The introduction of a trust product will attract more institutional capital, increasing XRP’s market value and driving price growth.
Market Confidence: The existence of grayscale confidence demonstrates the reliability of XRP as an investment product, increasing confidence among market participants.
Increased liquidity: With the establishment of trust, the liquidity of the XRP market will improve, which can lead to higher trading volume and more price stability.
Compliance and Transparency: The launch of Trust indicates greater regulatory compliance, which is a positive sign for legitimacy and market acceptance of XRP.

As for the XRP ETF, Lee noted that there is still no clear timeline. However, he stated that “Grayscale’s trust products are often considered precursors to ETFs.”

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