Crypto asset management behemoth Grayscale Investments has filed a 19b-4 application with the U.S. Securities and Exchange Commission (SEC) to convert its XRP Trust fund into an exchange-traded fund (ETF), which it is looking to list and trade on the New York Stock Exchange (NYSE). 

Grayscale Seeks SEC’s Permission To Convert $16 Million Ripple (XRP) Trust Into ETF

This filing comes shortly after the company submitted its proposals for releasing spot Litecoin (LTC) and Solana (SOL) ETFs. Grayscale now joins asset managers Bitwise, WisdomTree, Canary Capital, 21Shares, and CoinShares as prospective issuers of a Ripple (XRP) spot ETF. These filings are part of applications submitted to the SEC following Donald Trump’s return to the White House and his promise to support the crypto industry through friendly and accommodative regulations. 

The Grayscale XRP Trust, launched in September 2024, operates as a Delaware statutory trust that manages over $16 million worth of XRP. The company claims that converting the trust into an exchange-traded product (ETP) would enable much broader access to the cryptocurrency for retail and institutional investors while benefiting from the oversight of a regulated securities exchange in Nasdaq. 

The trust is designed as an investment vehicle that provides accredited investors with direct exposure to XRP. Since it is not a full-fledged ETF, there are fewer regulatory constraints while paving the way for a future conversion. 

The proposed ETF would hold XRP as its primary asset and track its price performance on a return basis, adjusted for operational fees. It would provide investors with regulated exposure to XRP without requiring direct ownership or self-custody of the cryptocurrency powering the XRPL blockchain. 

Grayscale’s XRP Trust has been flourishing this year. According to Nasdaq, the trust’s value soared by 300% on the back of speculation that a potential spot Ripple ETF could be approved in the coming months. 

The company also launched the Bitcoin Miners ETF (MNRS), which provides investors with exposure to the Bitcoin mining sector through investments in publicly traded mining firms. 

However, Grayscale’s landmark crypto investment product is the Grayscale Bitcoin Trust ETF (GBTC), launched in 2013 as a close-ended trust fund before being converted into a spot market-traded ETF in January 2024. 

GBTC solely invests in Bitcoin (BTC) and reflects the price of the apex cryptocurrency held by the company, subject to expenses and liabilities, while shares of the ETF can be traded on stock markets. Authorized Partners can invest in the fund by purchasing Bitcoin, which is held under Grayscale’s custody and an equivalent number of GBTC shares are issued. As of January 31, 2025, the Grayscale Bitcoin Trust has total assets under management (AUM) of approximately $21.22 billion. 

If approved, Grayscale’s spot XRP ETF would operate similarly to GBTC.

In an interview with Bloomberg earlier this month, Ripple President Monica Long stated that an XRP ETF could soon become a reality and is likely to be the next one in line after Bitcoin and Ether ETFs. She credited the Trump administration for their promise to support crypto innovation in the U.S. and locally-based businesses. 

DEX Trading Volume On XRP Surpasses $1 Billion Mark

Meanwhile, trading volumes on XRP-native decentralized exchanges (DEXs) crossed the $400 million mark in January as the blockchain continues to gain significant traction among traders. The network also surpassed the $1 billion milestone in trading volume for the first time since introducing the automated market maker (AMM) feature in May. XPRL registered a daily average trading volume of $17 million this month. 

XRP Ledger’s DEX is unique because it is directly built into the blockchain rather than functioning as a separate application or smart contract on top of the network, which is often the case with DEXs native to Ethereum or Solana. 

Ondo Finance Issues Tokenized U.S. Treasuries On Ripple

Another key development was Ripple Labs announcing a partnership with decentralized finance (DeFi) platform Ondo Finance to issue tokenized versions of U.S. Treasuries on the XRPL blockchain. The collaboration will allow institutional investors to mint and redeem Ondo Short-Term U.S. Government Treasuries (OUSG) in RLUSD – Ripple’s newly launched USD-denominated stablecoin. 

Ondo Finance’s OUSG is backed by $12 trillion asset manager BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL). Tokenized U.S. treasuries are attractive to institutional investors due to their ability to provide liquidity, efficiency, and transparency by leveraging blockchain technology. 

ETF Approvals Could See XRP Aiming For $6 Valuation 

XRP has been one of the top-performing cryptocurrencies lately, especially following Trump’s election victory in November, after which it recorded some of its biggest surges in recent years. 

Ripple Labs is working with global banks and financial institutions to adopt its blockchain for ledger keeping and cross-border transactions. So far, the company has partnered with 10 financial firms, including Santander, American Express, and MoneyGram. There are also reports that 80% of Japanese banks are set to adopt XRP Leder for their operations this year. 

With the ongoing developments surrounding potential ETF approvals, increasing DeFi activity, and banking partnerships, the price of XRP could soon surpass its $3.40 all-time high (ATH). Prominent crypto analyst ‘Dark Defender’ forecasts the price of XRP to reach the $6 milestone this year, driven by increasing industry-wide adoption. 

At the time of writing, Ripple (XRP) is trading at $3.07 – down 1.12% in the last 24 hours.