Grayscale's Large-Cap Fund Drops XRP
Grayscale Investments announced on January 5th that its Digital Large Cap Fund (DLC) has removed XRP from its portfolio and liquidated all positions. This decision followed a December 31st audit and Genesis Global Trading's suspension of XRP trading effective January 16th. The fund now holds only:
- Bitcoin (BTC): 81.63%
- Ethereum (ETH): 15.86%
- Bitcoin Cash (BCH): 1.08%
- Litecoin (LTC): 1.43%
👉 Why are institutional investors shifting crypto portfolios?
The removal of XRP (which constituted 1.46% of the fund) triggered nearly 6% price decline. While Grayscale's XRP Trust remains operational, all six Grayscale funds have paused private placements.
Exchange Listings Under Pressure
Blockchain.com became the latest exchange to suspend XRP trading, effective January 15th. The platform will:
- Halt XRP trading and deposits
- Maintain withdrawal functionality
Other exchanges that have restricted XRP trading include eToro and several undisclosed platforms.
Major Investor Tetragon Files Lawsuit
Tetragon Financial Group, lead investor in Ripple's 2019 $200M Series C round, has sued to enforce stock redemption rights. The lawsuit alleges:
- Contractual right to redemption if XRP is deemed a security
- Seeks temporary restraining order to freeze Ripple's liquid assets
Ripple countered:
"Tetragon's claims lack merit as no final determination about XRP's status exists. We're disappointed they're exploiting regulatory uncertainty and confident courts will rule in our favor."
The SEC's securities violation case against Ripple proceeds with a February 22nd court date, compounding XRP's challenges.
Whale Holdings Show Significant Decline
Recent data reveals concerning trends among large XRP holders:
- Addresses holding >1M XRP decreased by 8% (1,705 to 1,562)
- Daily transactions from whale addresses dropping steadily
FAQs: Understanding the XRP Situation
Q: Does Grayscale's XRP removal indicate regulatory concerns?
A: While not definitive, institutional caution suggests heightened compliance risk assessments.
Q: Can XRP recover from exchange delistings?
A: Historical precedents show recovery potential, but depends on regulatory clarity and market confidence restoration.
👉 How do crypto regulations impact exchange listings?
Q: What's the significance of Tetragon's lawsuit?
A: Represents investor confidence erosion and may influence other institutional decisions regarding XRP.
Q: Are whale sell-offs always bearish indicators?
A: Not necessarily - large holders may redistribute assets or wait for better entry points.
Market Outlook and Risk Considerations
The convergence of these factors creates unprecedented challenges for XRP:
- Regulatory uncertainty remains the primary overhang
- Institutional participation appears to be recalibrating
- Retail investor sentiment shows mixed signals
Risk Disclosure: Cryptocurrency investments carry substantial risk, including potential loss of principal. Market volatility requires careful risk assessment.