In this photo of the Ripple cryptocurrency “altcoin”, the photo was taken on April 25, 2018 in London, England.
Jack Taylor | Getty Images News | Getty Images
The price of Ripple’s XRP token surged on Thursday after Grayscale announced the launch of a new trust giving accredited investors direct exposure to the cryptocurrency.
Ripple It was last up more than 3%, reaching 56 cents per coin, according to Coin Metrics. Previously, its increase had been as high as 9%. XRP is the native token of Ripple XRP Ledger, whose main purpose is to facilitate cross-border financial transactions. It is the fifth largest coin by market cap (excluding stablecoins) Tether (USDT) and U.S. Department of Agriculture.
Unlike exchange-traded funds, the trust trades primarily over the counter. Trusts are also more likely to trade at prices that are inconsistent with the fundamental value of the portfolio.
“As cryptocurrency investors diversify beyond Bitcoin and Ethereum, we believe in protocols that offer solutions to real-world problems,” said Rayhaneh Sharif-Askary, head of product research at Grayscale. “XRP can reduce friction in international payments, thereby increasing efficiency in an evolving global economy.”
Last summer, Ripple achieved a partial victory in its three-year battle with the U.S. Securities and Exchange Commission, but it was still hailed as a landmark victory for the crypto industry. U.S. District Judge Analisa Torres ruled that XRP is not considered a security when sold on an exchange to retail investors, but is considered an unregistered securities offering if sold to institutional investors.
Grayscale made history shortly after a court ruled that the SEC erred in denying the crypto investment giant permission to convert its popular Bitcoin trust into an ETF. The agency approved the necessary rule changes in January. Grayscale Bitcoin Trust and Grayscale Ethereum Trust began trading as ETFs in January and July of this year respectively.
Major cryptocurrencies were flat on Thursday. Bitcoin last traded at $57,827.83, and Ethereum last traded at $2,331.58. MicroStrategy has barely changed. Coin library up 2%.
—CNBC’s Jesse Pond contributed reporting
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