03.08.2021

The largest cryptocurrency fund Grayscale liquidates its positions in XRP

The largest cryptocurrency investment company Grayscale Investments is ready to sever all ties with the XRP altcoin. Its representatives announced the liquidation of assets in XRP and the subsequent conversion of the released funds into Bitcoin, Bitcoin Cash and Litecoin.

We will remind, earlier, many exchanges have delisted XRP due to the increased pressure of the Securities and Exchange Commission (SEC) on the issuing company Ripple. Let’s understand the situation in more detail.

Grayscale is one of the largest cryptocurrency funds and coin holders in general. As we learned at the end of December 2020, the company has nearly $ 16 billion worth of cryptocurrencies at its disposal, most of which is Bitcoin. Grayscale holds nearly 600,000 BTC. At the same time, the volume of ethers reaches almost 3 million ETH.

For clarity, here is a graph showing Grayscale’s savings as of December. It is also important here to pay attention to the changes in coin balances on the right side. As you can see, on a monthly basis, the volume of all cryptocurrencies has increased significantly.

Accordingly, Grayscale’s refusal from XRP is a blow to the reputation of the Ripple token. In addition, such an action excludes the possibility for large clients of the fund to interact with the coin.

Why XRP is falling

The decision affects the Grayscale Digital Large Cap Fund, a market cap weighted asset that provides investors with access to the largest cryptocurrencies by market cap. The XRP sale came on Monday, which is less than a week after authorized fundraiser Genesis Global Trading announced an imminent temporary suspension of XRP trading, Cointelegraph reported.

At the moment, the fund’s assets are 81.63 percent BTC, 15.86 percent ETH, 1.08 percent BCH and 1.43 percent LTC. The fund’s management said XRP was “removed following the DLC Fund’s quarterly review.” He explained that no other asset can be included in the fund.

Grayscale’s assets under management recently surpassed the $ 20 billion mark for the first time, highlighting the broad institutional demand for bitcoins and other digital assets. Grayscale is buying up BTC in large quantities, creating a huge free cryptocurrency shortage in the market. Many experts believe that institutional pressure from buyers has pushed the market upward in recent months.

XRP is trading at $ 0.22 today. Over the past two weeks, the coin has dropped 49.5 percent in value.

Against the background of what is happening with the exchange rate, XPR has given the fourth line in the overall rating of cryptocurrencies to Litecoin. The current situation in the niche looks like this.

Today it became known that trading in pairs with XRP will be suspended by the Blockchain-com platform. The management of the exchange stressed that this decision was a direct reaction to the lawsuit of the US Securities and Exchange Commission against Ripple. The trading freeze will take place on January 14 this year, Decrypt reports.

However, the problems of the XRP issuing company did not end there. According to Cointelegraph, the lawsuit against Ripple was also filed by Tetragon, which became one of the main investors in Ripple in another round of investments in the company in 2019. The company now wants to “exercise their contractual right to demand that Ripple repurchase” Tetragon’s Series C preferred shares.

At the same time, representatives of Ripple consider the lawsuit groundless, and they accused the company itself of trying to take advantage of the “lack of regulatory clarity” in the United States when filing a lawsuit.

Sources also recalled the activities of Ripple co-founder Jed McCaleb. According to the data in the blockchain, in 2020 Jed got rid of XRP tokens in the equivalent of $ 411 million. He received the coins themselves thanks to his role in the project.

We believe that the situation with Ripple and XRP is unlikely to improve anytime soon. Nevertheless, the recent weakening of the token’s position was caused solely by the news of the start of a case initiated by the SEC and subsequent delisting on major cryptocurrency exchanges. At the same time, the trial itself has not yet begun, and its outcome may be completely unpredictable.

So investors should keep a close eye on the news regarding Ripple. Otherwise, you can miss the right moment to make the appropriate decision.

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