Grayscale Investments, a major U.S. digital asset management firm, has reintroduced XRP to its Digital Large Cap Fund (GDLC), hinting at potential developments related to an XRP Exchange-Traded Fund (ETF).
The digital asset investment firm shared the news on January 5 alongside news of quarterly rebalancing in various Grayscale investment products through a press release. This update highlighted adjustments in their investment portfolios.
Grayscale also increased their exposure to Avalanche (AVAX) tokens and re-added XRP to their fund.
The inclusion of XRP in GDLC has rekindled speculation about the imminent launch of an XRP ETF, signalling significant market movements.
XRP, Ripple’s native cryptocurrency, now constitutes 2.54% of GDLC’s market capitalization, securing its place as the fund’s fourth-largest holding behind Bitcoin, Ethereum, and Solana.
Grayscale’s decision to reintegrate XRP into its Digital Large Cap Fund marks a pivotal shift since its removal in January 2021 due to the SEC’s lawsuit against Ripple.
However, a pivotal court ruling in July 2023 categorizing XRP as a non-security reignited discussions for its potential reinstatement, aligning with relisting efforts by major U.S. exchanges like Coinbase and Kraken post the court’s ruling.
Notably, this strategic reintegration has sparked enthusiasm within the XRP community, bolstering their confidence in the token’s prospects. The move is viewed as a significant step toward legitimizing XRP’s status and its reacceptance within prominent investment portfolios.
A Potential Spot XRP ETF?
While Bitcoin and Ethereum have been at the forefront of discussions surrounding spot ETFs, XRP, being the only altcoin with a clear legal standing in the U.S., has surprisingly remained on the sidelines.
Questions loom as to why established asset management firms, such as BlackRock, have not pursued the idea of an XRP ETF, especially considering the clarity around its regulatory status.
Speculation surrounding an XRP ETF has previously surged, triggered by false reports of a BlackRock iShares XRP ETF in November, resulting in a temporary surge in XRP’s value. Despite these rumours and the recent XRP inclusion in Grayscale’s fund, the asset management firm has not officially hinted at the launch of an XRP ETF.
Market observers and XRP enthusiasts now await further developments following Grayscale’s reintegration of XRP into the GDLC Fund, keeping a close eye on potential hints or announcements regarding an XRP ETF, as it could potentially drive considerable shifts within the crypto investment landscape.