Grayscale Investments has taken a big step by launching the Grayscale XRP Trust, a closed-end fund that offers accredited investors a way to engage with XRP without having to directly buy or store it.
Grayscale XRP Trust, the first XRP product from Grayscale
The Grayscale XRP Trust is attracting attention as it provides a unique opportunity for investors interested in the potential of XRP.
By offering this fund, Grayscale makes it easier for those who might be hesitant to deal with the risks of holding XRP directly.
The launch of this trust also raises the possibility of an eventual transition to an XRP Exchange-Traded Fund in the future, but of course there is no official confirmation of such plans yet.
Some believe that if this happens, it could bring a new chapter in XRP’s role in the financial market.
Earlier this year, Grayscale successfully converted its Bitcoin and Ethereum trusts into ETFs, which already led some to speculate that XRP could follow a similar path.
While ETFs are closely regulated by the U.S. SEC, trusts face fewer restrictions, giving them some advantages for certain investors.
Grayscale’s return to the XRP space is especially important, given the company’s previous exit in 2021 when the SEC filed a $1.3 billion lawsuit against Ripple, the company behind XRP.
4-step plan
Grayscale also shared a detailed four-step plan for the future of the XRP Trust. Right now the trust is in the first, the private placement phase, where only accredited investors can buy shares.
Grayscale XRP Trust allows investors to gain exposure to $XRP, the token powering the XRP Ledger $XRPL, a distributed, peer-to-peer network created to help cross-border financial transactions.
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— Grayscale (@Grayscale) September 12, 2024
These shares are locked for one year, meaning investors can’t trade them during this time.
Grayscale believes that the XRP Trust gives investors access to a blockchain solution that could play a key role in improving traditional financial systems, particularly with cross-border payments.
In the next stage, the public quotation phase, shares will be available for all types of investors, with no restrictions on how much they can invest or how long they need to hold the shares.
But the company notes that public shares could trade at a price higher or lower than the value of the underlying XRP, a fact that worth to remember.
Future ETF ideas
The third phase focuses on increased transparency through U.S. SEC reporting, which will also shorten the holding period for private placement shares to six months.
This phase wants to give investors more insight into the workings of the trust.
Finally, the last phase involves turning the trust into an ETF-like product.
Grayscale uses the term ETF quite broadly to describe all exchange-traded investment products, and this phase includes further steps to make the trust resemble traditional ETFs, with ongoing opportunities for buying and selling shares.
