WisdomTree Launches Physically-Backed XRP Cryptocurrency ETP for Investors

WisdomTree, a global provider of financial products, has just launched its latest cryptocurrency exchange-traded product (ETP), the WisdomTree Physical XRP ETP (XRPW). This new offering is listed on Deutsche Börse Xetra, the Swiss SIX Exchange, and the Euronext exchanges in Paris and Amsterdam, making it easily accessible to investors across Europe. One noteworthy feature of this ETP is its management expense ratio of 0.50%, which is the lowest among similar products in Europe that offer exposure to XRP.

The main goal of this fund is to provide investors with a straightforward, secure, and cost-effective way to invest in XRP. It is fully backed by XRP, ensuring that investors have exposure to the spot price of XRP through a solid, physically backed structure. Additionally, investors can rest assured knowing that a dual custody model is in place, with regulated custodians overseeing the security of the underlying assets, which are stored in cold storage.

For those unfamiliar with XRP, it is a native digital asset of the XRP Ledger (XRPL), a decentralized and open-source blockchain. The XRPL utilizes a consensus mechanism known as Proof-of-Association (PoA), which is operated by a variety of entities to validate transactions. This system is more efficient than the more common Proof-of-Work (PoW) mechanism, requiring fewer hardware resources and consuming less energy.

XRP was created in 2012 with a focus on facilitating fast and sustainable payments. Transactions on the XRP Ledger can settle within 3-5 seconds, making it a speedy alternative to Bitcoin. Furthermore, XRP can be sent directly without the need for a central intermediary, making it an efficient tool for bridging different currencies quickly and effectively. It is widely traded on the open market and is utilized in real-world scenarios to enable cross-border payments and microtransactions.

Dovile Silenskyte, the Head of Digital Asset Analysis at WisdomTree, believes that in the current market environment, exposure to altcoins like XRP could potentially outperform traditional investments in Bitcoin and Ether. Including XRP alongside these well-known cryptocurrencies in a diversified multi-asset portfolio can help reduce the risk associated with holding a single token. Silenskyte emphasizes that cryptocurrencies make up more than 1% of the market portfolio and should therefore be a part of a comprehensive investment strategy. As a unique asset class with low correlation to traditional investments, cryptocurrencies can enhance diversification and possibly improve risk-adjusted returns within a multi-asset portfolio.

In conclusion, Alexis Marinof, Head of Europe at WisdomTree, sees this new launch as a valuable addition to their existing range of physically backed cryptocurrency ETPs. He notes that cryptocurrency ETPs offer investors a regulated way to access cryptocurrencies, which is becoming increasingly popular. With WisdomTree’s extensive experience managing physically backed ETPs for institutional investors and over $100 billion in assets under management globally, investors in their cryptocurrency ETPs can benefit from their expertise, global reach, scale, and resources.