A screenshot shared by The Good Morning Crypto official X account showing an XRP ETP on Fidelity Investments’ platform prompted reactions within the XRP community.
At first, many people interpreted this as a potential launch of a new XRP product by a reputable asset manager, potentially boosting adoption prospects for the digital asset.
However, a closer look revealed that the featured ETP originates from 21Shares (formerly Amun AG). AXRP is a product of 21Shares, a Swiss-based financial institution, which has been available on European exchanges like the SIX Swiss Exchange since April 2019.
Fidelity’s platform allows access to AXRP, but this does not mean that Fidelity is investing in or endorsing XRP. AXRP is an ETP, a broad category that includes ETFs and other instruments like exchange-traded notes. AXRP is issued and managed by 21Shares, with Fidelity serving as a platform provider.
However, this does not mean that the XRP community’s excitement was unwarranted. AXRP’s presence on Fidelity is a result of two recent developments in the XRP ecosystem that have improved its legal and institutional status.
The first development was the July 2023 ruling by Judge Analisa Torres, which declared XRP a non-security in the U.S., removing a major legal uncertainty for XRP and its users.
The second development was Grayscale’s re-addition of XRP to its Grayscale Digital Large Cap (GDLC) fund in October 2023, as reported by Crypto News Flash. The GDLC fund is a diversified basket of digital assets that represents the top 70 percent of the crypto market by market capitalization.
These two developments have increased the hopes for a possible U.S.-based XRP ETF in the future. An XRP ETF would be a type of ETP that tracks the price of XRP and allows investors to buy and sell XRP without holding the actual asset. This would provide more exposure and liquidity to a wider range of investors, as well as lower the barriers to entry and the risks involved.