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Market Musings

Yet Another Blow for XRP as Altcoin Removed from Major Fund

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Published on:
January 5, 2021

Grayscale's announcement came as one exchange vowed to stand by XRP until the SEC's legal action is over.

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It looks like things are going to get worse before they get better for XRP.


Grayscale Investments has now announced that it has removed XRP from its Digital Large Cap Fund — opting to ramp up its exposure to other constituents.


Bitcoin, Ethereum, Litecoin and Bitcoin Cash are going to be the biggest beneficiaries.


XRP only represented 1.46% of the fund as of Jan. 4 — something that investors will probably be breathing a sigh of relief over, as it means the value of their investment wouldn’t have been too adversely affected by the altcoin’s dramatic fall over Christmas and New Year.


The move comes as increasing numbers of exchanges announce plans to delist XRP in response to the U.S. Securities and Exchange Commission unveiling a lawsuit against Ripple, alleging that the sale of these tokens amounted to an unregistered sale of securities. 


Both sides will come face to face during a pretrial conference in the middle of February, meaning there’s some time to go until there’s a resolution.


Before Christmas, Grayscale also announced that it was no longer accepting new subscriptions to the XRP Trust, which focused solely on this cryptocurrency.


Not all exchanges have abandoned XRP. Uphold has decided that it will wait until there is a conclusion in the SEC’s action before deciding whether to delist the altcoin.


The company warned rival trading platforms against “rushing to judgment” and said that due process needs to take place through the U.S. courts. Its statement added:


“A vital part of the SEC’s remit is the protection of consumers. It is hard to see how a judgment rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors who purchased XRP in good faith would square with that remit. We remain hopeful of a sensible resolution.”


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