Here’s the Difference Between Buying Grayscale XRP Trust and Buying XRP

The financial market recently welcomed a new XRP Trust from Grayscale, three years after the initial one was liquidated due to the SEC-Ripple lawsuit.

With the end of the suit last month, Grayscale relaunched the XRP investment product this month, on September 5. The performance of the Grayscale XRP Trust has been commendable since the relaunch, attracting attention from the XRP community.

While this development further boosts optimism about XRP’s market value, some are pondering the difference between buying an XRP Trust and buying XRP tokens directly. Coach JV, a widely followed commentator in the community, attempted to clarify the confusion. 

Buying Grayscale XRP Trust or Buying XRP Yourself

In a recent post on X, Coach JV explained that when investing in a trust, such as the Grayscale XRP Trust, investors do not directly acquire the underlying asset (XRP). Instead, they gain exposure to the asset’s performance. This allows them to benefit from its potential growth without holding the XRP tokens themselves.

For the Grayscale XRP Trust, investors receive approximately 19.98 XRP for each share they purchase. As of this writing, the trust’s net asset value (NAV) stands at $11.79.

Interestingly, calculating the NAV per XRP yields a value of approximately $0.59, suggesting that buying and holding XRP through the open market or through the Grayscale XRP Trust costs roughly the same.

Coach JV pointed out that, given this parity, he would personally opt to buy XRP directly. 

However, a key advantage of purchasing XRP through the Grayscale Trust is that investors are not responsible for securing and safeguarding their assets. Grayscale handles custody on their behalf. This convenience comes at a cost, with Grayscale charging a 2.5% management fee.

Ultimately, the Grayscale XRP Trust provides a convenient option for traditional investors who may not be interested or equipped to manage their crypto portfolios themselves. Outsourcing custody and management to Grayscale allows these investors to gain exposure to XRP while minimizing the associated complexities.

Strong Institutional Interest in XRP Via Grayscale Trust

Notably, Grayscale’s XRP Trust’s strong performance has led Coach JV to highlight the significant institutional interest in XRP. This is evident in the trust’s growing assets under management (AUM), which reached $689,602 as of Thursday. 

This represents a notable increase from the previous day’s AUM of $646,729 and a more substantial growth from the $622,000 recorded on Tuesday.

Furthermore, the trust’s net asset value has also seen a significant boost, rising to $11.79, a 2.61% increase over the past day. This upward trend suggests that institutional investors are increasingly optimistic about XRP’s prospects and are allocating more capital to the trust as a result.