10-K: Grayscale XRP Trust ETF Navigates Volatility Post-Uplisting

Grayscale XRP Trust ETF reports a net decrease in assets from operations for 2025, despite its recent NYSE Arca listing and a significant fee reduction.

Summary

• Grayscale XRP Trust ETF (GXRP) was formed on August 5, 2024, and commenced operations on September 5, 2024, with its shares beginning trading on NYSE Arca on November 24, 2025, under the ticker symbol GXRP.
• The Trust's investment objective is to reflect the value of XRP held, less expenses and liabilities, and it does not use leverage or derivatives.
• Net assets increased to $223,364,000 at December 31, 2025, a 2038% increase from $10,450,000 at December 31, 2024, primarily due to contributions of approximately 117,379,274 XRP valued at $250,799,000.
• Net decrease in net assets resulting from operations was ($37,885,000) for the year ended December 31, 2025, compared to a net increase of $7,228,000 for the period from September 5, 2024, to December 31, 2024.
• This decrease was driven by XRP price depreciation from $2.10 per XRP on December 31, 2024, to $1.83 per XRP on December 31, 2025.
• The Sponsors Fee was lowered from 2.5% to 0.35% annually, effective November 24, 2025, with a waiver period until February 25, 2026, or until NAV exceeds $1.0 billion.
• As of December 31, 2025, the Trust held approximately 0.20% of the XRP in circulation, representing 122,230,386.260970 XRP.
• The Trust currently only accepts Cash Orders for creations and redemptions, as in-kind transactions are not yet provided for in Participant Agreements.
• The Trust has irrevocably abandoned all Incidental Rights and IR Virtual Currency, meaning shareholders will not receive benefits from forks or airdrops.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with a cautious sentiment. While the ETF listing and fee reduction are positive steps for accessibility and cost, the significant depreciation in XRP's value and the net decrease in operational assets for 2025, coupled with ongoing regulatory uncertainties and operational limitations like cash-only redemptions, present notable headwinds.

Positives

• The Trust's shares (GXRP) were approved for listing and began trading on NYSE Arca on November 24, 2025, enhancing accessibility for investors.
• The Sponsors Fee was significantly reduced from 2.5% to 0.35% annually, effective November 24, 2025, with a fee waiver period until February 25, 2026, or until NAV exceeds $1.0 billion, making the product more cost-effective.
• Net assets increased by 2038% to $223,364,000 at December 31, 2025, driven by substantial XRP contributions.
• The Trust employs robust security procedures, including cold storage for private keys, geographical distribution of key shards, and multi-signature requirements, to protect its XRP holdings.
• The Custodian (Coinbase Custody Trust Company, LLC) is a fiduciary under New York Banking Law and a qualified custodian under the Investment Advisers Act, providing a high level of asset protection.
• The Trust's structure as a passive investment vehicle avoids leverage and derivatives, simplifying its risk profile for investors seeking direct XRP exposure.

Negatives

• The Trust experienced a net decrease in net assets resulting from operations of ($37,885,000) for the year ended December 31, 2025, primarily due to XRP price depreciation.
• The price of XRP depreciated from $2.10 per XRP on December 31, 2024, to $1.83 per XRP on December 31, 2025, negatively impacting the Trust's value.
• The current unavailability of in-kind creations and redemptions, relying solely on Cash Orders, may hinder the arbitrage mechanism and cause shares to trade at premiums or discounts to NAV.
• Shareholders will not receive the benefits of any forks or airdrops, as the Trust irrevocably abandons all Incidental Rights and IR Virtual Currency.
• The Trust's NAV per Share declined from $41.67 at December 31, 2024, to $35.45 at December 31, 2025.
• The Trust's assets did not exceed $1.0 billion during the fee waiver period from November 24, 2025, to December 31, 2025, indicating slower-than-anticipated growth in assets under management.

Risks

• Extreme volatility of XRP trading prices could lead to a material adverse effect on the value of the Shares, potentially resulting in a loss of all or substantially all of their value.
• The medium-to-long term value of Shares is subject to factors relating to the capabilities and development of blockchain technologies and the fundamental investment characteristics of digital assets, which are still evolving.
• Digital assets represent a relatively new and rapidly evolving industry, and the value of Shares depends on the acceptance and continued development of XRP.
• Concentrated ownership of XRP (top 100 wallets hold ~83%) could lead to adverse effects on market price from large sales or distributions.
• A temporary or permanent fork or a clone of the XRP Network could adversely affect the value of the Shares, and the Sponsor's discretion in choosing the 'true' network may not align with the most valuable fork.
• Recent volatility and disruption in digital asset markets, including failures of prominent industry participants (e.g., FTX, Celsius, Voyager), could lead to a loss of confidence and market-wide declines in liquidity.
• The largely unregulated nature and lack of transparency surrounding Digital Asset Trading Platforms may expose them to fraud, market manipulation, business failures, and security issues, affecting XRP value.
• Digital Asset Trading Platforms may be exposed to front-running and wash-trading, which could distort prices and negatively impact market perception.
• The Index used to calculate XRP value has a limited history, and its failure or material deviation from actual market prices could adversely affect Share value.
• Competition from other digital assets (e.g., Bitcoin, Ethereum, Stellar), central bank digital currencies (CBDCs), and private blockchain initiatives could negatively impact XRP demand and price.
• Congestion or delays on the XRP Network may delay purchases or sales of XRP by the Trust, reducing confidence and attractiveness.
• Reliance on third-party service providers (Custodial Entities, Authorized Participants, Liquidity Providers) means disruptions to their operations could adversely impact the Trust.
• Uncertainty regarding the legal rights of customers with digital assets held by third-party custodians in insolvency proceedings, potentially treating the Trust as an unsecured creditor.
• The Shares may trade at a premium or discount to the Trust's NAV per Share due to non-concurrent trading hours between NYSE Arca and the 24-hour Digital Asset Trading Platform Market.
• Any suspension or unavailability of the Trust's redemption program could cause Shares to trade at a discount to NAV per Share.
• The amount of Trust assets represented by each Share will decline over time as the Trust pays the Sponsors Fee and Additional Trust Expenses in XRP.
• Security threats, including hacking attacks and malware, to the Trust's Vault Balance or Settlement Balance could result in loss of assets or operational disruption.
• XRP transactions are irrevocable, and stolen or incorrectly transferred XRP may be irretrievable, leading to potential losses.
• Lack of full insurance coverage for the Trust's XRP and limited legal recourse against service providers expose the Trust and shareholders to loss.
• The Trust may be required to terminate and liquidate at a disadvantageous time for shareholders, especially if XRP prices are depressed.
• Limited shareholder voting rights and restrictions on derivative actions concentrate control with the Sponsor.
• The Sponsor's sole discretion in determining NAV and Index Price, and potential errors or changes in calculation, could adversely affect Share value.
• Extraordinary expenses (e.g., taxes, legal fees) not covered by the Sponsor's fee could require the sale of XRP at unfavorable times, reducing Share value.
• The Trust's delivery or sale of XRP to pay expenses could result in shareholders incurring tax liability without an associated cash distribution.
• Intellectual property rights claims against the Trust could lead to extraordinary expenses or forced termination.
• Pandemics, epidemics, and other disasters could negatively impact digital asset demand and disrupt Trust operations.
• A determination that XRP is a security by the SEC or a federal court could have a material adverse impact on XRP's trading value, liquidity, and potentially lead to the Trust's termination or classification as an unregistered investment company.
• Regulatory changes or actions by U.S. Congress or federal/state agencies (e.g., FinCEN, OFAC, CFTC, IRS) may restrict XRP use or operation of the XRP Network, adversely affecting Share value.
• Regulatory changes or events in foreign jurisdictions (e.g., China, South Korea, UK, EU MiCA) may conflict with U.S. laws and negatively impact XRP acceptance globally.
• If regulators classify an Authorized Participant, the Trust, or the Sponsor as a money service business or money transmitter, it could incur extraordinary expenses and decrease Share liquidity.
• Statutory or regulatory changes could obligate the Trust or Sponsor to register under new regulations (e.g., CEA, Investment Company Act), leading to extraordinary expenses or Trust termination.
• The U.S. federal income tax treatment of the Trust as a grantor trust and of digital assets (XRP, forks, airdrops) is uncertain and evolving, potentially leading to adverse tax consequences for shareholders.
• Potential conflicts of interest may arise among the Sponsor or its affiliates (e.g., DCG's investments in other digital assets/companies, Kraken minority interest) and the Trust, potentially favoring their own interests.
• The Sponsor's management has limited history operating investment vehicles like the Trust, and their experience may be inadequate.
• The lack of independent advisers representing investors in the Trust means investors should consult their own legal, tax, and financial advisers.

Future Outlook

The SEC has launched a crypto task force and Project Crypto to develop a comprehensive regulatory framework for digital assets, which could lead to new rules for digital asset distributions, custody, and trading. The report from the interagency working group recommends legislation clarifying self-custody, Bank Secrecy Act obligations for service providers, CFTC authority over spot markets in non-security digital assets, and tax laws. The Sponsor anticipates continued volatility in digital asset markets and regulatory uncertainty, particularly regarding the classification of XRP as a security. The Trust will continue to operate as a passive investment vehicle, tracking XRP price less expenses, and does not intend to change its policy on abandoning Incidental Rights or IR Virtual Currency unless regulatory approval is obtained.

Management Comments

• The Sponsor believes that the security procedures in place for the Trust are reasonably designed to safeguard the Trust's XRP.
• The Sponsor believes that it is applying the proper legal standards in determining that XRP is not a security in light of the uncertainties inherent in the Howey and Reves tests.
• The Sponsor does not intend to dissolve the Trust on the basis that XRP could at some future point be finally determined to be a security, for so long as there are good faith grounds to conclude it is not a security.
• The Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period, as it only holds cash to facilitate Cash Orders.

Industry Context

StockSavvy.ai notes that the digital asset industry continues to be characterized by extreme volatility and significant regulatory uncertainty, as evidenced by the SEC's ongoing efforts to establish a clear framework and past enforcement actions against major platforms like Binance, Coinbase, and Kraken. The Grayscale XRP Trust ETF's performance is directly tied to XRP's value, which is influenced by broader market sentiment, regulatory developments, and competition from other digital assets and traditional financial systems. The recent failures of crypto lenders and exchanges underscore the inherent risks in the ecosystem. The emergence of central bank digital currencies (CBDCs) and private blockchain initiatives by financial institutions like J.P. Morgan's Kinexys (formerly Onyx) poses a competitive threat to XRP's utility as a cross-border payment facilitator. The Trust's fee reduction and ETF listing are strategic moves to enhance competitiveness in a rapidly evolving market, but the reliance on cash-only creations/redemptions and the abandonment of fork/airdrop benefits could limit its appeal compared to direct XRP ownership or other more flexible investment vehicles.

Comparison to Industry Standards

• The Trust's Sponsors Fee of 0.35% (post-waiver) is competitive within the ETF space, particularly for digital asset products, aiming to attract investors by being 'cost-effective' compared to direct XRP acquisition and safekeeping.
• The Trust's security measures, including cold storage and multi-signature protocols, are aligned with industry best practices for institutional digital asset custody, comparable to those used by leading custodians like Coinbase Custody Trust Company, LLC.
• The Trust's performance, with XRP price depreciation from $2.10 to $1.83, reflects the broader market volatility seen in digital assets, similar to the significant fluctuations experienced by Bitcoin and Ethereum in recent periods.
• The Trust's reliance on Cash Orders for creations and redemptions, while SEC-approved for certain spot digital asset ETPs, contrasts with the in-kind model often preferred for efficient arbitrage in commodity ETFs, potentially making it less efficient than some other commodity-based ETFs.
• The Trust's decision to irrevocably abandon Incidental Rights and IR Virtual Currency differs from some direct digital asset holdings or other investment vehicles that might allow investors to benefit from forks or airdrops, potentially placing it at a comparative disadvantage.

Management Changes

Corporate Governance

Legal Proceedings

• Grayscale Operating, LLC (former Co-Sponsor) is a party to a lawsuit filed by Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. in the SDNY Bankruptcy Court, alleging preferential transfers of 105 Bitcoin and 37,647.06 Ethereum Classic tokens to GSI (predecessor to GSO). GSO believes the lawsuit is without merit and intends to vigorously defend against it.
• The Sponsor does not expect the Genesis Capital proceedings to have a material adverse effect on the Trust's business, financial condition, or results of operations.
• DCG (indirect parent of Sponsor) agreed to a cease-and-desist order and paid a $38 million civil money penalty arising from SEC allegations of negligently misleading investors about Genesis Capital's financial condition.

Related Party Transactions

• Digital Currency Group, Inc. (DCG) is the indirect parent company of the Sponsor and holds a minority interest (less than 1.0%) in Kraken, one of the Digital Asset Trading Platforms included in the Index.
• DCG has investments in a large number of digital assets and companies within the digital asset ecosystem, including trading platforms and custodians, which could create conflicts of interest.
• Grayscale Securities, LLC, an affiliate of the Sponsor, served as the sole Authorized Participant from September 5, 2024, to November 21, 2025, and was removed effective December 1, 2025.
• Jane Street Capital, LLC, one of the current Authorized Participants, is an affiliate of JSCT, LLC, one of the Liquidity Providers.
• Virtu Americas LLC, one of the current Authorized Participants, is an affiliate of Virtu Financial Singapore Pte. Ltd., one of the Liquidity Providers.
• The Sponsor and its staff also service other affiliated digital asset investment vehicles, potentially diverting resources from the Trust.
• The Sponsor has historically, and may again, select an Index Provider that is an affiliate of the Sponsor and the Trust (CoinDesk Indices, Inc. is the Index Provider, and its affiliates include CC Data Limited).

Stakeholder Impact

• Shareholders: Will benefit from increased accessibility and potentially lower costs due to the NYSE Arca listing and reduced Sponsors Fee. However, they face risks from XRP price volatility, regulatory uncertainty, and the Trust's inability to benefit from forks/airdrops. Limited voting rights and derivative action restrictions also impact shareholder influence.
• Authorized Participants: New unaffiliated Authorized Participants have been engaged, potentially increasing competition and efficiency in the creation/redemption process. However, the reliance on Cash Orders and potential for suspension of redemptions could impact their ability to perform arbitrage effectively.
• Sponsor (Grayscale Investments Sponsors, LLC): Benefits from the Sponsors Fee (though reduced) and manages the Trust's operations. Faces risks related to regulatory compliance, market volatility, and potential conflicts of interest due to its broader affiliations within the digital asset ecosystem.
• Custodial Entities (Coinbase Custody Trust Company, LLC and Coinbase, Inc.): Continue to provide critical custody and prime brokerage services, earning fees from the Sponsor. Face risks related to security breaches, regulatory changes impacting qualified custodian status, and potential insolvency proceedings.
• XRP Network/Ecosystem: The Trust's operations contribute to the demand for XRP, but its passive nature and abandonment of Incidental Rights mean it does not actively influence network development or governance. Regulatory actions against XRP or the broader digital asset market could significantly impact the ecosystem.

Next Steps

• The Sponsor will continue to monitor for material hard forks or airdrops and notify investors of any material policy changes regarding Incidental Rights and IR Virtual Currency by filing a current report on Form 8-K.
• The Sponsor may adjust the creation and redemption order size in the future to improve the effectiveness of Authorized Participants' activities in the secondary market.
• The Sponsor will continue to evaluate the Index Provider's weighting algorithm and may change the methodology for determining the Index Price based on periodic reviews or extreme circumstances.
• The Sponsor may engage additional Authorized Participants and Liquidity Providers in the future to enhance the Trust's operations.
• The Trust will continue to file all disclosures with respect to its Recovery of Erroneously Awarded Compensation Policy in accordance with federal securities laws.

Key Dates

Recommendation

StockSavvy.ai recommends a 'hold' for Grayscale XRP Trust ETF (GXRP) at this time. The recent listing on NYSE Arca and the significant reduction in the Sponsors Fee are positive developments that enhance accessibility and cost-efficiency for investors seeking XRP exposure. However, the Trust's performance for the year ended December 31, 2025, showed a net decrease in assets from operations driven by XRP price depreciation, highlighting the inherent volatility of the underlying asset. Significant regulatory uncertainty surrounding XRP's classification as a security, coupled with the current operational limitation of cash-only creations and redemptions (which can hinder arbitrage efficiency), presents substantial risks. While the Trust offers a convenient way to gain exposure, these factors suggest a cautious approach. Investors should monitor regulatory clarity, XRP price stability, and the evolution of the Trust's operational mechanisms before considering further investment.

Keywords

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