New exchange-traded funds holding XRP have raised nearly $1 billion in assets in the first weeks of trading in the United States. Fund filings through Dec. 4 show that five ETFs together hold about $985 million in cryptocurrencies. Its arrival offers investors a way to gain exposure to XRP in regular brokerage accounts, without opening crypto wallets or using trading platforms that hold clients’ assets offshore.
XRP has been in the spotlight since a federal court ruled in July 2023 that secondary market sales of the token are not securities. That decision cleared the way for companies to seek approvals for products linked to the asset. The first ETF launched on October 29, followed by several competitors over the following month. The Canary ETF has become the largest yet, reporting more than $350 million in holdings in a short period. More issuers have funds pending with regulators.
With a market value of around $130 billion at current prices, XRP is among the largest digital assets. The portion that is now inside ETFs is small relative to supply, so the change has not changed market prices noticeably. What has changed is who controls an increasing share of XRP. Instead of moving in and out of trading venues at high frequency, the currencies backing ETF shares are stored in institutional custody accounts until clients sell those shares.
That storage approach reduces the amount of XRP available for short-term speculation. How important this is will depend on whether the funds continue to grow. If they do, ETFs will keep a greater proportion of the asset out of daily trading while opening the door to investors who previously stayed away from cryptocurrency custody risk.
XRP is used in some cross-border transaction solutions promoted by Ripple, and software developers have continued to introduce new applications for the XRP Ledger, including tokenized financial assets. Greater availability of regulated investment vehicles could eventually connect these two sides (use in financial infrastructure and ownership through traditional markets), but for now the change is mainly about access.
The initial response suggests there was pent-up interest from investors hoping for a regulated avenue to participate. That demand reduces reliance on crypto exchanges and marks a shift toward the types of investment structures already common in other asset classes.
Also read: Bitcoin, Ethereum and XRP Gain After Major Short Liquidations