Grayscale's XRP Trust to Become Spot ETF

NYSE Arca has taken a significant step in the cryptocurrency investment landscape by filing a 19b-4 form with the SEC to convert Grayscale's XRP Trust into a spot ETF. This move reflects the growing institutional interest in digital assets and Grayscale's adaptability in the evolving market.

The application, submitted on January 31, seeks to modify existing rules to allow for the ETF's trading. If approved by the SEC, the filing will be published in the Federal Register, initiating the approval process. This is the second step in a two-step process for applying for a spot crypto ETF in the United States.

Notably, if the SEC grants approval, Coinbase Custody Trust Company will handle custodial services, while BNY Mellon Asset Servicing will manage the fund's transfer operations. This conversion highlights the rising institutional interest in digital assets amid evolving regulations.

Grayscale's XRP Trust, managing approximately $16.1 million in assets, is among multiple trusts the firm is revitalizing. This move follows the successful transitions of its Bitcoin Trust into a spot ETF in January 2024 and the Ethereum Trust in July 2024. The urgency for such conversions can be attributed to surging institutional interest, exacerbated by the recent political climate which has emboldened new applications for various crypto ETFs.

The recent push for crypto ETF approvals coincides with Donald Trump securing a second presidential term, a factor that has galvanized expectations around more favorable regulations for digital assets. Investors are keenly watching as these political dynamics evolve, as Trump's campaign has promised not only to ease regulations but to position the U.S. as a global leader in cryptocurrency innovation.

Investor sentiment regarding XRP has experienced a boom, with the cryptocurrency approaching its all-time high of $3.40 earlier in the month, currently trading at $3.13. This resurgence in value reflects a broader market shift and the growing acceptance of cryptos, driven largely by the introduction of popular spot Bitcoin and Ethereum ETFs from major financial entities such as BlackRock and Fidelity.

The recent activity in applying for new crypto ETFs does not stop with Grayscale. Other asset managers, including Rex Shares, Canary Capital, and 21 Shares, have submitted applications to launch their own XRP