Grayscale Officially Removes XRP from the Fund; Addresses with Large Amounts of XRP Drops Sharply

Today, Grayscale officially announced that it has “removed” XRP from its Digital Large Cap Fund (DLC) after the quarterly review on Dec. 31st, 2020.

The cash proceeds from this will be used to purchase the remaining crypto assets in the fund including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).

As of Jan. 4, 2021, BTC now accounts for 81.6% of the fund followed by Eth at 15.9% with LTC and BCH having the smallest shares of 1.4% and 1.1% respectively.

Prior to the sale of XRP today, XRP was approximately 1.46% of the Fund.

Last week we reported that Grayscale has sold 9.19 million of its XRP holdings only to add more XRP to bring the total XRP holdings to 38.88 million, as per the data source Bybt.

At the time, Grayscale declined any such sales of any crypto asset.

But today, the world's largest crypto asset manager announced the updated Fund Component weightings of the Fund which along with the report of temporary suspension of XRP starting Jan. 15, 2021, at 5 p.m. ET. The announcement reads,

“According to the Fund's documentation, during the Fund's quarterly review, the Manager may determine to exclude a digital asset from the Fund's portfolio even if it meets the Fund's Inclusion Criteria, including, but not limited to, if the Authorized Participant does not have the ability to trade or otherwise support such digital asset.”

The removal has been in the light of SEC suing Ripple and its two executives for allegedly selling unregistered securities.

A long line of cryptocurrency exchanges and service providers have temporarily suspended XRP trading XRP -4.17% XRP / USD XRPUSD $ 0.73
-$0.03-4.17% Volume 2.53 b Change -$0.03 Open $0.73 Circulating 46.31 b Market Cap 33.59 b 3 d Ripple Teams Up with SBI To Launch First On-Demand Liquidity Service In Japan 5 d SWIFT Takes Swipe At Ripple With A Cheaper Cross-border Payment System 1 w 50% of Family Offices Wants to Invest In Cryptocurrencies: Goldman Sachs Report for the US customers.

This has led to the number of addresses holding large amounts of XRP dropping steeply ever since the SEC first announced the charges against the company.

Source: CoinMetrics

According to Coin Metrics, the number of addresses holding at least 1 million XRP dropped from 1,721 on December 21st, the day before the announcement, to 1,567 by January 3rd.

The price of XRP also suffered a beating, falling to $0.169 on Dec. 28 — a drop of 83% from the high of $0.92 over a month before that.