5th XRP ETF Set to Launch After Cboe Nod, Poised for Nearly $1B Inflows

Quick overview

The Cboe exchange has just given the green light to 21Shares’ latest XRP exchange-traded fund (ETF) – marking the fifth U.S. spot XRP product to get the thumbs up. That’s a big deal, as the fund is currently registered with the SEC, and we can expect it to be listed on the market once the final compliance requirements are in place – after which it’ll trade under the ticker TOXR.

This move comes hot on the heels of 21Shares’ fifth big update (or amendment) to its S-1 registration – a standard part of the launch process. Although this particular filing has been labelled a “delaying amendment” – which suggests the issuer might be waiting on a comment letter from the SEC – those in the know think this is a pretty good sign that launch is just around the corner.

As soon as it’s up and running, the ETF will track the CME CF XRP-Dollar Reference Rate (New York Variant), a benchmark that provides price exposure to XRP without the hassle of holding or managing the underlying tokens. This is a big plus for both institutional investors and individual investors who want to get into the crypto market without taking on all the associated risks.

To reassure nervous investors, 21Shares has built robust compliance and security measures into the fund’s design. It’s also got a standard sponsor fee of 0.30% per year, paid out in XRP.

Ripple Markets has also stepped up to the plate, contributing a whopping 100 million XRP (or around $226 million at today’s prices) to help kickstart the fund’s creation and redemption operations. Authorized participants will be able to trade either in-kind (i.e., by transferring XRP) or through cash settlements, giving them the flexibility to manage their positions as they see fit.

XRP Spot ETFs Near $1B in Flows

US spot XRP ETFs have seen a huge influx of capital in a very short time, with the collective total now standing at just shy of a landmark $1 billion in under 4 weeks. The latest numbers put the total assets under management at around $954 million across the various products.

A few key highlights of these XRP spot ETFs include:

• Not a single day of net outflows has been reported across all the different U.S. spot XRP ETFs.
• Just yesterday, we saw $10 million in net inflows, despite the broader crypto market being pretty choppy.
• Fastest growth rate in terms of assets under management (AUM) of any U.S. crypto ETF – according to comments from Ripple CEO Brad Garlinghouse.

It’s fair to say that investor appetite for regulated crypto exposure – especially for tokens beyond Bitcoin and Ethereum – is a major factor driving this trend. The strong inflow of cash is a clear sign that people are moving away from speculative crypto trading and towards more regulated investment vehicles that make it easy to track the performance of these tokens.

Ripple’s Network Update Boosts Utility

In the capital markets, all eyes are on Ripple, which has just rolled out a major XRP Ledger update to improve network stability and DeFi capabilities. This is expected to make transactions more reliable and broaden the utility of the XRP ledger for emerging financial applications.

As XRP ETFs continue to take off and the XRP network goes from strength to strength, we can expect to see much more institutional adoption and market integration in the not-too-distant future.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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