- Grayscale has announced the establishment of Grayscale XRP Trust
- XRP’s price jumped by 9.8% after the announcement
Throughout the last month, the XRP community has experienced a welcome period of calm as Ripple’s legal challenges appear to be subsiding. Recent victories in court against the SEC have instilled a sense of hope within the community, encouraging a focus on a brighter future.
This newfound optimism is now highlighted by Grayscale’s involvement in the space.
Introducing XRP Trust!
As per Grayscale’s announcement, the crypto asset manager has launched the Grayscale XRP Trust. This trust aims to offer investors the chance to attain access and exposure to the cryptocurrency driving the XRP Ledger. With this exposure, institutions can tap into a decentralized, peer-to-peer network designed for facilitating cross-border financial transactions.
Source: Grayscale
According to the asset manager’s announcement, the fund is available to eligible accredited investors through private placements.
Significantly, Grayscale’s entry aligns with Ripple’s focus on enterprise solutions instead of retail XRP investors. Jake Claver has noted that Ripple’s business strategy is primarily focused on large-scale payment solutions rather than retail adoption like many other blockchain initiatives.
Unlike ETFs that have fluctuating share volumes, the closed-end trust has a set amount of shares, leading to lower liquidity.
Market Response to the News
After the unveiling of Grayscale XRP Trust, the markets responded positively almost instantaneously. For instance, XRP’s price increased by 9.8%, reaching a local peak of $0.588, while trading volume surged by 105.54% to $1.7 billion. Its market capitalization also rose by 6%, bringing it to $32.2 billion.
At the time of this writing, the altcoin was priced at $0.57.
Can XRP Continue Its Upward Trend?
XRP has experienced a consistent bullish momentum over the past month. The altcoin not only gained on daily charts but also recorded a 5.07% increase on the weekly charts.
Source: CryptoQuant
Current market dynamics suggest the altcoin could achieve additional gains on the price charts.
For instance, the Network Value to Transactions (NVT) Ratio has been on a decline since August 31, falling from 1732 to 118 at press time. A declining NVT Ratio indicates that the altcoin may be undervalued, suggesting that the market has not yet fully appreciated the value derived from the network’s transaction activities.
With the asset positioned this way, it reflects long-term confidence in the network’s utility as more users engage with the blockchain for transactions. This is a bullish signal, implying the market is poised to catch up, leading to a price increase.
Source: Santiment
Moreover, XRP’s funding rate aggregated by exchanges has remained predominantly positive over the past week, indicating that long positions have been compensating short positions. This demonstrates a bullish sentiment, as it signals that investors expect prices to increase and are even willing to pay premiums in downturns.
In summary, XRP is enjoying favorable market sentiment, as demonstrated by rising institutional interest. Should the positive sentiment continue, the altcoin may target the $0.611 resistance level shortly.
In a bullish scenario, it could break through the persistent $0.64 resistance level.
