The Rise of XRP ETFs: Why Franklin Templeton's XRPZ Could Outperform Grayscale in a Regulatory-Efficient Crypto Market

The launch of XRP spot ETFs in the United States marks a pivotal moment for institutional-grade crypto exposure. With Franklin Templeton's XRPZ and Grayscale's GXRP both debuting on November 24, 2025, the market is now presented with two distinct pathways for accessing XRP. However, a closer examination of their structural, regulatory, and institutional adoption dynamics reveals why Franklin Templeton's XRPZ is uniquely positioned to outperform Grayscale in a regulatory-efficient market.

Regulatory Alignment: A Cornerstone of Institutional Confidence

Franklin Templeton's XRPZ ETF (ticker: EZRP) is structured as a grantor trust that directly holds XRP tokens, with its net asset value (NAV) calculated using the CME CF XRP-Dollar Reference Rate (New York Variant) according to reports. This design aligns with U.S. Securities and Exchange Commission (SEC) requirements, ensuring compliance with existing regulatory frameworks. The fund's custodian, Coinbase Custody, further reinforces institutional confidence by providing secure storage and operational transparency as reported. In contrast, Grayscale's GXRP, while also trading on NYSE Arca, is not registered under the Investment Company Act of 1940, a fact highlighted by analysts, leaving it without the same level of regulatory oversight and investor protections. For institutional investors prioritizing compliance, XRPZ's adherence to established standards offers a critical advantage.

Fee Structure and Incentive Design

Franklin Templeton has strategically priced XRPZ with an annual sponsor fee of 0.19%, significantly lower than Grayscale's historical trust fees for its crypto products. To accelerate adoption, the firm has waived fees on the first $5 billion of assets until May 31, 2026, a move designed to attract capital in a competitive market. This fee waiver not only reduces investor costs but also signals long-term commitment to the product's success. Grayscale's GXRP, while benefiting from initial inflows via trust conversions (projected at $1–$2 billion), lacks such a cost-reduction mechanism. In a market where cost efficiency drives institutional allocation, XRPZ's structure is more likely to retain and grow assets over time.

Institutional Adoption and Liquidity Dynamics

The institutional adoption of XRP ETFs is being fueled by improved custody solutions and regulatory clarity. Franklin Templeton, with over $1.5 trillion in assets under management, brings institutional credibility that amplifies trust in its XRPZ offering. Analysts project $150–$250 million in day-one trading volume for XRPZ, with first-week inflows potentially reaching $500 million to $1 billion as projected. This momentum is further supported by Franklin's conservative allocation approach, which mirrors the successful launch of the Bitwise XRP ETF (initial volume: ~$25 million) according to market analysis. Grayscale's GXRP, while benefiting from its existing trust holders, faces challenges in transitioning private placements to public markets-a process that may dilute initial enthusiasm.

Market Impact and Long-Term Prospects

The combined activity of XRP ETFs is expected to drive institutional demand for XRP and enhance overall market liquidity according to analysts. However, XRPZ's regulatory alignment and fee structure position it to capture a larger share of this demand. By adhering to SEC guidelines and leveraging Coinbase's infrastructure, Franklin Templeton mitigates compliance risks that have historically hindered crypto adoption. Additionally, the fund's use of the CME CF reference rate ensures price transparency, a critical factor for institutions navigating volatile markets as noted.

Conclusion

In a crypto market increasingly defined by regulatory scrutiny and institutional-grade requirements, Franklin Templeton's XRPZ stands out for its comprehensive compliance framework, cost-competitive fee model, and strategic alignment with institutional priorities. While Grayscale's GXRP benefits from brand recognition and existing trust holders, its lack of 1940 Act registration and absence of fee incentives may limit its long-term appeal. As XRP's liquidity and price trajectory evolve, XRPZ's regulatory efficiency and institutional-grade design make it a compelling choice for investors seeking exposure to the XRP Ledger's growing ecosystem.