Most people don't want to rewire their houses to plug in a new gadget, so if they need to hook something up to a different type of current, they buy a cheap little adapter that's good enough for the job.
In a similar vein, the new Canary XRP ETF (XRPC 8.21%) launched on Nov. 13 could be viewed as a kind of adapter for investing in XRP (XRP 0.09%). Instead of asking investors to learn about crypto wallets and seed phrases, it takes XRP and drops the crypto into the familiar wrapper of an exchange-traded fund (ETF) that one can easily hold in any type of brokerage account.
Is this ETF the right way for you to get exposure to XRP's long-term upside potential? Let's weigh the pros and cons.
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What the Canary XRP ETF actually does
A spot ETF is a fund that holds an asset, such as XRP, directly and issues shares that investors can buy and sell through their normal brokerage or retirement accounts. The Canary XRP ETF's mandate is to hold XRP in custody and track its price denominated in U.S. dollars. It also takes a small management fee for operating the fund.
It's the first U.S. spot XRP ETF, which means that its approval and launch will itself act as a catalyst for the cryptocurrency. Within its first trading day, investors purchased roughly $245 million worth of its shares. That made it by far the most successful crypto ETF launch of the year, surpassing the highly anticipated spot Solana ETF launched a couple of weeks earlier, which only brought in approximately $69 million in inflows. The first-day traction was strong enough that XRPC posted about $58 million in trading volume.
What is vital for investors to appreciate is that under the hood, XRPC is just a bridge to XRP.
NASDAQ: XRPC
Key Data Points
XRP is the native token of the XRP Ledger, a blockchain optimized for fast and low-cost payments and settlements, and marketed to financial institutions and currency exchange houses. The ledger requires each account to hold a small XRP balance as a reserve, and every transaction destroys a tiny amount of XRP as a fee. The ETF leaves the coin in shorter supply for those who want to use it for transactions, thereby potentially forcing prices upward over time.
But is it a buy?
If XRPC is "just XRP in a convenient wrapper," the natural next step is to compare that wrapper to holding the coin outright.
What XRPC offers is convenience. It does not excuse investors from determining whether or not they have a good investment thesis for buying XRP. The ETF offers a way to gain exposure to XRP within a traditional brokerage account, with its familiar statements, consolidated tax reporting, and no wallet or private key management. You do, however, give up the ability to send those coins on-chain to pay fees, move money, or interact with XRP Ledger applications directly, because you never actually hold the XRP yourself. For many investors, that will be a pretty appealing trade-off, even when considering the ETF's expenses.
CRYPTO: XRP
Key Data Points
The Canary XRP ETF's 0.5% expense ratio is modest by crypto ETF standards, but still not something that should be ignored. If you own XRP directly, you won't necessarily have to incur any ongoing fees if you aren't making any transactions. The main costs incurred by crypto exchanges include platform fees and any additional fees required by your wallet software or self-custody solution, which are only payable if you wish to transfer your coins.
However, it's essential to note that XRPC is not a separate bet from XRP at all. It's just a distribution channel for XRP. If you wouldn't buy XRP in the first place, buying XRPC makes little sense because it lives and dies based on the underlying coin's price action.
XRP's core investment thesis is that its ledger will continue to win business as a fast, low-cost, compliance-friendly network for payments, stablecoins, and tokenized real-world assets (RWAs), particularly with banks and other institutions. If that adoption story unfolds, it is likely that more institutional investors will seek exposure to the coin. The ETF makes it easier for the traditional financial sector to participate in this crypto's story, which should incrementally add to XRP's demand over time.
Assuming you already have a sensible and diversified portfolio, it might be reasonable for you to allocate a small slice of your capital to XRP. If you want that exposure without ever touching a crypto wallet, then yes, the new ETF is worth buying, as long as you treat it as a multiyear position and recognize that its fate is tied entirely to XRP itself. If you are comfortable with on-chain tools and willing to do some homework on custody, direct XRP ownership offers a marginally better upside with significantly more flexibility.
Either way, the ETF's launch is a milestone for XRP. Whether it belongs in your portfolio depends less on the details about the fund itself and more on your convictions regarding the coin it carries.
