XRP Spot ETF comes very close according to iTrustCapital

The introduction of an XRP Spot exchange-traded fund (ETF) seems to be getting closer, according to iTrustCapital. Several asset managers have submitted applications to the US Securities and Exchange Commission (SEC). In an official blog, iTrustCapital highlights both the advantages and disadvantages of a possible launch of such an ETF.

What is an XRP Spot ETF?

Just like existing Bitcoin (BTC) and Ethereum (ETH) Spot ETFs, an XRP Spot ETF will track the price of the underlying cryptocurrency. The fund holds XRP tokens on behalf of investors, making it possible to invest in XRP through traditional financial markets without directly managing the tokens themselves.

Institutional investors in particular see this as an attractive option, because they often prefer regulated and trusted financial products.

Benefits of an XRP ETF

According to iTrustCapital, an XRP ETF offers two important benefits:

1. Accessibility: Investors can easily invest in XRP through their existing investment accounts.
2. Regulation: The fund is subject to regulated financial markets, which provides greater security for investments. This makes it a more reliable alternative to direct trading in cryptocurrencies, which are often less heavily regulated.

Disadvantages of an XRP ETF

However, iTrustCapital also points out some disadvantages:

1. Limited trading hours: Unlike the crypto market, which is open 24/7, ETFs have fixed trading hours.
2. No direct ownership: Investors do not own the XRP tokens themselves; these are managed by the fund. This can lead to deviations between the ETF price and the actual market price of XRP.
3. High management costs: Relatively high costs can negatively affect the ultimate return of an ETF.

Although the arrival of an XRP Spot ETF could be an important development for the crypto market, iTrustCapital emphasizes that investors should carefully weigh the pros and cons before jumping in.

Claim €10 free today and pay no trading fees on the first €10,000!

Grab this unique opportunity with Newsbit and Bitvavo by creating an account now via the button below. Deposit just €10 and immediately receive €10 free. In addition, you can trade your first €10,000 in trades for 7 days without any fees. Start today and benefit immediately from the growing popularity of crypto!

Create your account and claim your €10 free.

Don’t miss this opportunity to immediately benefit from the growing popularity of Crypto!