10-Q: 21Shares XRP ETF Q1 2026 Performance Update

21Shares XRP ETF reports a significant decrease in Net Asset Value (NAV) for Q1 2026, primarily driven by a decline in XRP's market price and substantial share redemptions.

Summary

• The 21Shares XRP ETF experienced a substantial 42.60% decrease in its Net Asset Value (NAV) from $247,658,271 on December 31, 2025, to $142,148,631 on March 31, 2026.
• This decline was largely attributed to a 26.47% decrease in the price of XRP, which fell from $1.83 to $1.34 during the quarter.
• The ETF also saw a significant net decrease in outstanding shares, with 4,030,000 shares redeemed compared to 990,000 shares created, resulting in a net reduction of 3,040,000 shares.
• The net assets resulting from operations for the quarter were a loss of $52,307,128.
• Total expenses for the quarter were $142,862, primarily consisting of the Sponsor Fee, a significant reduction from $1,558,678 in the prior year's quarter.
• The ETF's investment objective remains to track the performance of XRP, adjusted for expenses.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the substantial decrease in NAV, driven by a significant drop in XRP's price and considerable share redemptions, indicating poor recent performance and potential investor outflow.

Positives

• The Sponsor Fee was significantly reduced to 0.30% of NAV, down from 2.50% prior to December 11, 2025, leading to substantially lower expenses in the current quarter compared to the prior year.
• The Sponsor continues to cover ordinary operating expenses beyond the Sponsor Fee, including marketing, administrative, legal, and audit fees, up to certain limits.

Negatives

• The Net Asset Value (NAV) of the ETF decreased by 42.60% during the quarter.
• The value of the underlying asset, XRP, decreased by 26.47% during the quarter.
• There was a substantial net redemption of shares, with 4,030,000 shares redeemed versus 990,000 created.
• The ETF reported a net loss from operations of $52,307,128 for the quarter.
• The Net Asset Value per share decreased from $17.83 to $13.10.

Risks

• The Trust's investment strategy is concentrated solely in XRP, meaning any decrease in XRP's value will directly and significantly impact the Trust's value.
• The Trust is subject to market risks associated with digital assets, including volatility and regulatory changes.
• Shareholder rights to bring derivative actions are significantly restricted by the Trust Agreement, requiring a minimum of 10% of outstanding shares held by at least two non-affiliated shareholders, and a pre-suit demand process.
• The enforceability of the derivative action restrictions has not been definitively established by courts.
• The Trust's shares are held in book-entry form through DTC, making it difficult for individual shareholders to identify and coordinate with other shareholders to meet the 10% threshold for derivative actions.

Future Outlook

The filing does not contain specific forward-looking guidance on future performance metrics. It reiterates the investment objective to track the performance of XRP, adjusted for expenses, and acknowledges that actual results may differ materially from forward-looking statements due to various risks and uncertainties.

Management Comments

• The Sponsor believes that all adjustments necessary to present fairly the financial position and results of operations for the interim periods have been made.
• Management has evaluated the effectiveness of the Trust's disclosure controls and procedures and concluded they were effective.
• There have been no changes in internal control over financial reporting during the quarter that have materially affected or are likely to materially affect it.

Industry Context

StockSavvy.ai notes that the performance of the 21Shares XRP ETF is intrinsically tied to the volatile digital asset market, specifically XRP. The significant NAV decline reflects broader market trends in cryptocurrencies during the period, while the reduction in sponsor fees aligns with industry efforts to lower expense ratios for crypto-ETFs.

Comparison to Industry Standards

• The Sponsor Fee of 0.30% is competitive within the digital asset ETF space, though some newer ETFs may offer even lower fees.
• The concentration risk in a single digital asset (XRP) is a common characteristic of many single-asset crypto ETFs, differentiating them from diversified traditional ETFs.
• The structure of the ETF, utilizing XRP custodians and a reference rate for valuation, is standard for digital asset-backed ETFs.

Corporate Governance

Legal Proceedings

• As of March 31, 2026, the Trust was not subject to any material legal proceedings, nor are any threatened.

Related Party Transactions

• The Sponsor, 21Shares US LLC, is a related party to the Trust.
• The Sponsor receives a Sponsor Fee for its services.
• As of March 31, 2026, the Sponsor owned 20,000 Shares of the Trust.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to the decline in XRP's price and the ETF's NAV.
• The reduced Sponsor Fee benefits shareholders by lowering the cost of holding the ETF.
• The concentration risk in XRP means that any adverse developments affecting XRP directly impact shareholder value.

Next Steps

• The Trust will continue to operate under its investment objective to track the performance of XRP.
• The Sponsor will continue to manage the Trust's operations and expenses.
• Shareholders may continue to create or redeem Shares in Creation Baskets through Authorized Participants.

Key Dates

Recommendation

While the recent performance is negative, the ETF's core function is to track XRP. The significant reduction in fees is a positive development for long-term holders. Investors should base their decision on their outlook for XRP itself, rather than solely on this quarter's performance, given the ETF's passive tracking nature. A 'hold' recommendation reflects the need for investors to assess the underlying asset's prospects.

Keywords

21Shares XRP ETF, TOXR, Form 10-Q, Quarterly Report, XRP, Digital Asset ETF, Cryptocurrency, Net Asset Value, Share Redemptions, Sponsor Fee, SEC Filing