Throughout the last month, the XRP community has experienced a period of peace as Ripple’s legal battles have started to fade away. Recent victories in court against the SEC have rejuvenated hope among the community for a brighter future.
This renewed optimism is now reflected in the involvement of Grayscale, a cryptocurrency asset manager.
Enter the XRP Trust!
Grayscale has announced the launch of Grayscale XRP Trust, providing investors with a chance to invest in the token powering the XRP Ledger. This move allows institutions to participate in a decentralized network intended for facilitating international financial transactions.
The trust is currently accessible to eligible accredited investors through a private placement offering.
Grayscale’s involvement aligns with Ripple’s focus on enterprise-level solutions rather than individual XRP holders. According to Jake Claver, Ripple’s business strategy revolves around large-scale payment solutions, distinguishing it from typical retail-focused blockchain projects.
Unlike ETFs with fluctuating share amounts, the closed-end trust has a fixed number of shares, resulting in lower liquidity.
Market Reaction to Grayscale XRP Trust
Following the announcement of Grayscale XRP Trust, the market responded positively. XRP’s value surged by 9.8%, reaching a peak of $0.588, while trading volume spiked by 105.54% to $1.7 billion. The market capitalization also rose by 6% to $32.2 billion.
Currently, XRP is priced at $0.57.
Potential for a XRP Rally
Over the recent month, XRP has maintained an upward trend on the charts. The altcoin has seen gains not just on daily but also on weekly charts, increasing by 5.07%.
The prevailing market conditions suggest a possibility for further price increases.
One notable indicator is the Network Value to Transactions (NVT) Ratio, which has been declining since August 31st. The ratio dropped from 1732 to 118, indicating that the market undervalues XRP’s transaction network utility.
When the network is undervalued, it signals long-term confidence in its utility, with increasing user interactions. This positivity suggests that the market will eventually acknowledge its value, driving prices higher.
Moreover, XRP’s funding rate across exchanges has predominantly been positive, showing that long positions have outperformed short positions. This bullish sentiment indicates investor expectations of rising prices, even during market downturns.
XRP is currently enjoying favorable market conditions, with growing institutional interest. If this positive sentiment persists, the altcoin is likely to challenge the $0.611 resistance level in the near future.
In a bullish scenario, surpassing the stubborn $0.64 resistance level from the past becomes a possibility.