In another daring move, crypto asset management giant Grayscale will launch the first U.S. XRP trust on Thursday. As per Fox Business report, Accredited investors will have direct exposure to XRP, the cryptocurrency behind Ripple’s XRP Ledger, which facilitates cross-border payments, through this “closed-end” fund. Launching this trust is significant for all those crypto fans who fear entering the market, especially XRP holders. XRP notably jumped 8% following the news. 

Are good times for XRP incoming? Let’s find out. 

Trust vs. ETF: Understanding the Difference

Unlike ETFs, which are designed for retail investors and require rigorous SEC approval, trusts are less regulated and cater to accredited investors. The Grayscale XRP trust is structured as a trust, but it may convert into an ETF with the right regulatory approach. This approach mirrors Grayscale’s successful conversion of its Bitcoin and Ether trusts into ETFs earlier this year, highlighting its strategy of paving the way for broader market access.

Regulatory Hurdles and Market Sentiment

Interestingly, Grayscale’s launch of the XRP trust arrives amidst ongoing regulatory challenges. Ripple Labs is locked in a legal battle with the SEC, which alleged in 2020 that XRP sales were unregistered securities. A Manhattan judge ruled last year that XRP sales to institutional investors are securities, but those to retail investors are not.

The SEC has until early October to appeal this decision. Despite these hurdles, Grayscale remains positive about XRP’s prospects. Rayhaneh Sharif-Askary from Grayscale highlighted the trust’s potential to enhance financial systems through better cross-border payments, underscoring confidence in XRP’s long-term value.

Impact on the Crypto Market

In the meantime, introducing the XRP trust could have several implications. It represents a significant step towards institutionalizing XRP, potentially setting the stage for a future ETF. This move will likely attract attention from institutional and retail investors who have been waiting for more regulated investment products in the crypto space.

Currently trading at $0.54, XRP is well below its all-time high of $3.84 reached in 2018 before the SEC’s legal actions began. However, Grayscale’s trust could provide a new avenue for investors, potentially influencing XRP’s market performance and its journey towards higher valuations.

What’s Next?

As Grayscale moves forward with its XRP trust, the crypto community will be watching closely. The development is expected to stir interest and may lead to further regulatory advancements and market innovations. The SEC’s upcoming decisions and the potential transition of the XRP trust into an ETF will be key factors in shaping the future of XRP and its role in the broader cryptocurrency ecosystem.

Also Check Out: XRP Price Prediction: Liquidation Looms as Ripple Whales Dump Millions

Will this be a golden period for XRP holders?

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