Grayscale liquidates the XRP Trust

Grayscale is liquidating its XRP Trust, which is its XRP-based investment fund.

The decision was announced directly by Grayscale and is a consequence of Ripple’s legal proceedings with the SEC.

Essentially, Grayscale is simply following in the footsteps of other well-known exchanges, including Coinbase, which are suspending XRP trading.

In fact, the SEC is accusing Ripple of selling the XRP token without presenting it as security. Until the legal process runs its course, continuing to sell a token that could be a security while not complying with the relevant laws could create problems for exchanges or trusts that offer XRP.

XRP Grayscale Trust, the funds distributed to investors

Grayscale has therefore also decided to dispose of the trust dedicated to the Ripple token. In order to avoid the possibility that one day it may become difficult to convert XRP into US dollars, Grayscale has decided to liquidate its XRP Trust, distributing the net cash proceeds to the Trust’s shareholders, after deducting expenses and putting part of the proceeds into reserves. 

The liquidation of the XRP Trust is virtually complete, as the Trust no longer appears among those listed by Grayscale in its latest update. 

01/13/21 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $24.7 billion$BTC $BCH $ETH $ETC $ZEN $LTC $XLM $ZEC pic.twitter.com/EuBwQLjFXV

— Grayscale (@Grayscale) January 13, 2021

In total, Grayscale currently holds $24.7 billion in cryptocurrency assets, down from its January 12th update in which it counted $25 billion in assets. The value of the Grayscale XRP Trust was $11.3 million. 

Ripple, the price of XRP holds up

For Ripple, the situation is getting more complicated. The abandonment of Grayscale, considered the world’s largest cryptocurrency asset manager, is also indicative of investor abandonment.

However, at the moment the price of XRP seems not to have been particularly affected. After sinking to as low as $0.20 in the days following the announcement of the lawsuit against the SEC, the price of XRP had bounced back to above 30 cents. Today, while much of the market is positive with double-digit gains, XRP is hovering around parity. 

In any case, the SEC’s move has eroded Ripple’s market share, which now stands at 1.3%, causing it to slip back to fourth place in terms of capitalization, trailing the Tether stablecoin.