NYSE Greenlights Grayscale's XRP and Dogecoin ETFs

The New York Stock Exchange (NYSE) has officially approved the listing of Grayscale’s Exchange-Traded Funds (ETFs) for XRP and Dogecoin, allowing both funds to commence trading starting Monday.

Key Takeaways:

The NYSE has authorized Grayscale’s XRP and Dogecoin ETFs, transitioning long-standing private trusts into ETF formats.
These launches coincide with a wave of new altcoin ETF approvals.
Analysts caution that ongoing ETF withdrawals might push Bitcoin prices down to around $82,000.

NYSE Arca, the ETF-focused arm of the exchange, filed certifications on Friday that confirm the listing and registration of Grayscale's XRP Trust ETF Shares and Dogecoin Trust ETF Shares under the Securities Exchange Act of 1934.

NYSE Approves Listings for Grayscale’s XRP and Dogecoin ETFs

Grayscale Transforms Established Trusts Into ETFs

Importantly, both products represent the transformation of long-established private trusts into publicly listed ETFs.

According to NYSE Arca, “These approvals certify the listing and registration” of the trusts, allowing two of the most closely watched assets in the crypto market to gain access to ETF space.

XRP is currently the fourth-largest cryptocurrency, while Dogecoin, which began as a meme, holds the title of the largest memecoin globally, supported by a devoted retail following.

Grayscale’s recent conversions come at a time when the number of new crypto ETFs in the US is on the rise.

In the last year, funds focusing on Litecoin, HBAR, XRP, and Solana have achieved listings, following the SEC’s guidance released during a government shutdown. This guidance clarified that issuers could go public without waiting for formal approval, as long as they met the listing standards approved by the SEC in September.

If everything goes as planned, Grayscale’s Dogecoin ETF will mark the second such fund in the US, following the introduction of the REX-Osprey DOGE product in September, which is under the Investment Company Act of 1940.

Grayscale now offers ETF products linked to Bitcoin, Ethereum, Dogecoin, Solana, and XRP, expanding its range as the appetite for funds focused on altcoins grows.

Market Concerns Amid ETF Outflows

These approvals arrive at a time when there is a noticeable decline in sentiment regarding crypto ETFs.

US spot Bitcoin ETFs experienced nearly $1 billion in outflows on Thursday, marking the second-largest daily withdrawal reported among 12 funds in this category.

BlackRock’s IBIT fund faced $355 million in outflows, while Grayscale's GBTC and Fidelity’s FBTC each lost almost $200 million.

The crypto market is on track for its worst week since February, with approximately $4 billion withdrawn over the past month as Bitcoin's price dipped about 30% during the same timeframe.

Since launching last year, spot Bitcoin ETFs have emerged as a vital indicator of demand for Bitcoin and a significant source of price volatility.

Citi Research has estimated that every $1 billion in outflows is correlated with a 3.4% drop in Bitcoin’s price, according to a Bloomberg report.

Analyst Alex Saunders has set a bear-case price target of $82,000 for Bitcoin by the end of the year, citing the hesitance of long-term holders and insufficient new inflows.

Currently, Bitcoin is trading around $85,000, after earlier falling to approximately $80,553 on Friday.

Despite this volatility, the issuance of new funds is continuing at a fast pace. Since October 10, 17 new crypto-linked ETFs have been launched, which constitutes about a quarter of the total this year, with many more pending SEC review.

Nonetheless, institutional investors are approaching the market with increasing caution. Stephane Ouellette, CEO of FRNT Financial, noted that clients are beginning to believe that the recent October peak near $125,000 may have represented the peak of the current cycle, as newly launched ETFs are reporting double-digit declines.

Matt Maley, chief market strategist at Miller Tabak, commented, “With all this discussion about bubbles, the inability of the asset class to make a convincing recovery is instilling real fear into the market.”