Grayscale XRP Trust ETF: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under “Part II, Item 1A. Risk Factors” in this Quarterly Report, or in “Part I, Item 1A. Risk Factors” and “Forward-Looking Statements” or other sections of our Annual Report.

Trust Overview

The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees. The Trust holds XRP and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of XRP. On November 21, 2025, in connection with the approval of the application under the Generic Listing Standards and the effectiveness of the registration statement on Form S-1, the Sponsor authorized the commencement of a redemption program. Shares of the Trust began trading on NYSE Arca on November 24, 2025, following the effectiveness of the Trust’s registration statement on Form S-1. The Trust issues Shares only in one or more blocks of 10,000 Shares (a block of 10,000 Shares is called a “Basket”) to certain Authorized Participants from time to time. Baskets are offered in exchange for XRP. Through its redemption program, the Trust redeems Shares from Authorized Participants on an ongoing basis. As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on XRP per Share) to reflect the value of the XRP held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities. While an investment in the Shares is not a direct investment in XRP, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to XRP. The Trust is not managed like a business corporation or an active investment vehicle. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

Critical Accounting Policies and Estimates

Investment Transactions and Revenue Recognition

The Trust considers investment transactions to be the receipt of XRP by the Trust in connection with Share creations and the delivery of XRP by the Trust in connection with Share redemptions or for payment of expenses in XRP. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in XRP.

Principal Market and Fair Value Determination

To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S. GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for XRP in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that XRP is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives XRP in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Quarterly Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

• First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.
• Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of XRP traded on each Digital Asset Market in the trailing twelve months.
• Third, the Trust then reviews pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.
• Fourth, the Trust then selects a Digital Asset Market as its principal market based on the highest market-based volume, level of activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Trust, Trading Platform Markets have the greatest volume and level of activity for the asset. The Trust therefore looks to accessible Trading Platform Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market. As a result of the aforementioned analysis, a Trading Platform Market has been selected as the Trust’s principal market.

The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust’s determination of its principal market.

Investment Company Considerations

The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services—Investment Companies. The Trust uses fair value as its method of accounting for XRP in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

Review of Financial Results (unaudited)

Financial Highlights for the Three and Six Months Ended June 30, 2026 and 2025

(All amounts in the following table and the subsequent paragraphs, except Share, XRP and price of XRP amounts, are in thousands)

(1) Net assets in the above table and subsequent paragraphs are calculated in accordance with U.S. GAAP based on the Digital Asset Market price of XRP on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Net realized and unrealized loss on investment in XRP for the three months ended June 30, 2026 was ($16,789), which includes a realized loss of ($29) on the transfer of XRP to pay the Sponsor’s Fee, a realized loss of ($433) on the sale of XRP to meet redemptions, and net change in unrealized appreciation/depreciation on investment in XRP of ($16,327). Net realized and unrealized loss on investment in XRP for the period was driven by XRP price depreciation from $1.34 per XRP as of March 31, 2026, to $1.04 per XRP as of June 30, 2026. Net decrease in net assets resulting from operations was ($16,846) for the three months ended June 30, 2026, which consisted of the net realized and unrealized loss on investment in XRP, plus the Sponsor’s Fee of $57. Net assets decreased to $57,413 at June 30, 2026, a 7% decrease for the three-month period. The decrease in net assets resulted from the aforementioned XRP price depreciation, the withdrawal of approximately 43,829 XRP to pay the foregoing Sponsor’s Fee, and the redemption of approximately 581,493 XRP with a value of $699 from the Trust, partially offset by the contribution of approximately 9,886,902 XRP with a value of $13,442 to the Trust in connection with Share creations during the period.

Net realized and unrealized gain on investment in XRP for the three months ended June 30, 2025 was $1,255, which includes a realized gain of $47 on the transfer of XRP to pay the Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in XRP of $1,208. Net realized and unrealized gain on investment in XRP for the period was driven by XRP price appreciation from $2.09 per XRP as of March 31, 2025, to $2.32 per XRP as of June 30, 2025. Net increase in net assets resulting from operations was $1,179 for the three months ended June 30, 2025, which consisted of the net realized and unrealized gain on investment in XRP, less the Sponsor’s Fee of $76. Net assets increased to $12,893 at June 30, 2025, a 13% increase for the three-month period. The increase in net assets resulted from the aforementioned XRP price appreciation and the contribution of approximately 115,907 XRP with a value of $269 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 34,315 XRP to pay the foregoing Sponsor’s Fee.

Net realized and unrealized loss on investment in XRP for the six months ended June 30, 2026 was ($51,668), which includes a realized loss of ($39) on the transfer of XRP to pay the Sponsor’s Fee, a realized loss of ($34,161) on the sale of XRP to meet redemptions, and net change in unrealized appreciation/depreciation on investment in XRP of ($17,468). Net realized and unrealized loss on investment in XRP for the period was driven by XRP price depreciation from $1.83 per XRP as of December 31, 2025, to $1.04 per XRP as of June 30, 2026. Net decrease in net assets resulting from operations was ($51,748) for the six months ended June 30, 2026, which consisted of the net realized and unrealized loss on investment in XRP, plus the Sponsor’s Fee of $80. Net assets decreased to $57,413 at June 30, 2026, a 74% decrease for the six-month period. The decrease in net assets resulted from the aforementioned XRP price depreciation, the withdrawal of approximately 59,982 XRP to pay the foregoing Sponsor’s Fee, and the redemption of approximately 103,407,401 XRP with a value of $180,780 from the Trust, partially offset by the contribution of approximately 36,272,725 XRP with a value of $66,577 to the Trust in connection with Share creations during the period.

Net realized and unrealized gain on investment in XRP for the six months ended June 30, 2025 was $919, which includes a realized gain of $103 on the transfer of XRP to pay the Sponsor’s Fee and net change in unrealized appreciation/depreciation on investment in XRP of $816. Net realized and unrealized gain on investment in XRP for the period was driven by XRP price appreciation from $2.10 per XRP as of December 31, 2024, to $2.32 per XRP as of June 30, 2025. Net increase in net assets resulting from operations was $761 for the six months ended June 30, 2025, which consisted of the net realized and unrealized gain on investment in XRP, less the Sponsor’s Fee of $158. Net assets increased to $12,893 at June 30, 2025, a 23% increase for the six-month period. The increase in net assets resulted from the aforementioned XRP price appreciation and the contribution of approximately 647,661 XRP with a value of $1,682 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 66,213 XRP to pay the foregoing Sponsor’s Fee.

Cash Resources and Liquidity

The Trust only receives and holds cash in order to facilitate creations and redemptions pursuant to Cash Orders, and has not otherwise had or maintained a cash balance at any time since inception. When selling XRP in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of XRP needed to pay expenses in order to minimize the Trust’s holdings of assets other than XRP. In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements.

Generally, the Trust does not intend to hold cash, except in connection with Cash Orders for creations or redemptions of Baskets. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.

In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the periods covered by this Quarterly Report was the Sponsor’s Fee.

The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee of the Trust in its discretion for stated periods of time. Effective November 24, 2025, the Sponsor determined to waive a portion of the Sponsor’s Fee until the earlier of (x) February 25, 2026 and (y) the first date on which the NAV of the Trust exceeds $1.0 billion (such period, the “Fee Waiver Period”). Following the expiration date of the three-month waiver period on February 25, 2026 (the “Sponsor’s Fee Waiver Expiration Date”), the Sponsor’s Fee is 0.35%.

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Selected Operating Data

(1) The Principal Market NAV and Principal Market NAV per Share are calculated using the fair value of XRP based on the price provided by the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date, in accordance with U.S. GAAP.

(2) The Trust’s NAV and NAV per Share are derived from the Index Price, as represented by the Index as of 4:00 p.m., New York time, on the valuation date. The Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of June 30, 2026 were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, Gate, Gemini, HashKey, Kraken, LMAX Digital, and OKX. The Digital Asset Trading Platforms included in the Index as of June 30, 2025 were Bitstamp by Robinhood, Crypto.com, Kraken and LMAX Digital. See “Item 1. Business—Overview of the XRP Industry and Market—XRP Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price.

The Trust reflects creations and redemptions and the XRP for proceeds receivable or payable with respect to such creations and redemptions, respectively, on the trade date, which is the business day an accepted creation or redemption order is placed by an Authorized Participant. Creation and redemption orders are settled on T+1 or T+2, as established at the time of order placement, and therefore the XRP for proceeds receivable or payable with respect to such creations and redemptions, respectively, are recorded as a receivable or payable until the XRP are delivered or removed from the Trust for settlement.

Historical NAV and XRP Prices

As movements in the price of XRP will directly affect the price of the Shares, investors should understand recent movements in the price of XRP. Investors, however, should also be aware that past movements in the XRP price are not indicators of future movements. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

Effective as of November 24, 2025, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NYSE Arca. Hence, the Trust’s performance for periods prior to November 24, 2025 is not directly comparable to, and should not be used to make conclusions in conjunction with, the Trust’s performance for periods subsequent to November 24, 2025.

The following chart illustrates the movement in the Trust’s NAV per Share versus the Index Price and the Trust’s Principal Market NAV per Share from September 5, 2024 (the commencement of the Trust’s operations) to June 30, 2026. For more information on the determination of the Trust’s NAV, see “Item 1. Business—Overview of the XRP Industry and Market—XRP Value—The Index and the Index Price” in our Annual Report.

The following table illustrates the movements in the Index Price from September 5, 2024 (the commencement of the Trust’s operations) to June 30, 2026. The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of June 30, 2026, individually or as a group.

The following table illustrates the movements in the Digital Asset Market price of XRP, as reported on the Trust’s principal market, from September 5, 2024 (the commencement of the Trust’s operations) to June 30, 2026.

20

Effective as of November 24, 2025, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NYSE Arca. The following chart sets out the historical closing prices for the Shares as reported by NYSE Arca and the Trust’s NAV per Share from November 24, 2025 to June 30, 2026.

GXRP Premium/(Discount): GXRP Share Price vs. NAV per Share (Non-GAAP) ($)

The following chart sets out the historical premium and discount for the Shares calculated as a percentage of the historical closing prices for the Shares as reported by NYSE Arca divided by the Trust’s NAV per Share from November 24, 2025 to June 30, 2026.

GXRP Premium/(Discount): GXRP Share Price vs. NAV per Share (Non-GAAP) (%)

The Trust Agreement does not authorize the Trust to borrow for payment of the Trust’s ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust does not invest in derivative financial instruments and has no foreign operations or long-term debt instruments.

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor concluded that the Trust’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There was no change in the Trust’s internal controls over financial reporting that occurred during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, these internal controls.

There have been no material changes to the Risk Factors last reported under “Part I, Item 1A. Risk Factors” of our Annual Report.