What an XRP ETF is and where to buy one

An XRP ETF is a fund that holds XRP (the cryptocurrency issued by Ripple) or tracks its price movement, and trades on a traditional stock exchange like a regular stock. Instead of buying XRP directly through a crypto exchange, you buy shares of the fund through a brokerage account — the same way you would buy shares of Apple or an S&P 500 fund.

As of early 2024, spot XRP ETFs have become available in the United States after regulatory approval. You can buy them through any brokerage that offers ETF trading: Fidelity, Charles Schwab, E*TRADE, Vanguard, TD Ameritrade, or your bank's investment platform if it has one. The process is identical to buying any other ETF — you search for the fund's ticker symbol, enter the number of shares you want, and place the order during market hours.

The main advantage over buying XRP directly is that you hold the shares in a regular brokerage account, which means your account is SIPC-insured (up to $500,000 per account type) and you can hold it in tax-advantaged accounts like IRAs. You also avoid the complexity of setting up a crypto wallet or using a crypto exchange.

Key Takeaways

  • You buy XRP ETF shares through any brokerage that offers ETF trading, using the same process as buying any stock or fund.
  • XRP ETF shares trade during regular stock market hours (9:30 a.m. to 4 p.m. Eastern), not 24/7 like crypto exchanges.
  • You can hold XRP ETF shares in tax-advantaged accounts like traditional or Roth IRAs, which you cannot do with direct crypto purchases.
  • The fund holds actual XRP or tracks its price, so you own an interest in XRP without managing a private crypto wallet.
  • You pay the fund's expense ratio (a yearly fee, usually under 0.5% for XRP ETFs) plus any trading commissions your brokerage charges.

Opening or using an existing brokerage account

You need a brokerage account to buy an XRP ETF. If you already have one at Fidelity, Schwab, Vanguard, or another major broker, you can use it when ready — no new account is required. Log in, search for the XRP ETF ticker, and place your order.

If you do not have a brokerage account, you will need to open one. The process takes 10 to 20 minutes online. You provide your name, address, Social Security number, and employment information. The brokerage verifies your identity and then deposits funds into your account (usually by linking a bank account or transferring money from another investment account). Most brokerages do not charge account opening fees.

Once your account is open and funded, you can buy the XRP ETF when ready. There is no waiting period. If you are opening an IRA specifically to hold the XRP ETF, the same process applies — you open the IRA at your chosen brokerage, fund it, and then buy the ETF shares within it.

Finding the right XRP ETF and checking its details

Multiple XRP ETFs may be available, so you should compare them before buying. The main differences are the expense ratio (the yearly fee the fund charges), the fund size (larger funds are usually more stable), and whether the fund holds actual XRP or uses derivatives to track the price.

To find current XRP ETFs, search your brokerage's fund screener or search engine for "XRP ETF" plus the current year. Major financial websites like Yahoo Finance, Morningstar, or your brokerage's research tools will show you the available funds, their ticker symbols, expense ratios, and fund size. Read the fund's prospectus (a legal document the fund publishes) to understand exactly what it holds and how it works.

Pay attention to the expense ratio — this is the percentage of your investment the fund charges annually. An XRP ETF with a 0.2% expense ratio costs $20 per year on a $10,000 investment. A 0.5% ratio costs $50 on the same amount. Over decades, this difference compounds, so lower is better if the funds are otherwise similar.

Placing your first XRP ETF order

Once you have chosen your ETF and your brokerage account is funded, buying shares is straightforward. Log into your brokerage account, search for the ETF by its ticker symbol (for example, XRPL or another ticker depending on which fund you chose), and click to view the fund details.

Click "Buy" or "Trade." Your brokerage will ask how many shares you want to purchase. Enter the number of shares (not the dollar amount — you buy shares, not dollars). Review the order: the number of shares, the current price per share, the total cost, and the settlement date (usually two business days after you place the order). Then submit the order.

The order executes during market hours (9:30 a.m. to 4 p.m. Eastern on weekdays when the stock market is open). If you place an order after market hours or on a weekend, it will execute the next time the market opens. Your brokerage will confirm the purchase and show the shares in your account.

Understanding costs and tax treatment

You pay two types of costs when you buy an XRP ETF: the expense ratio (charged by the fund itself) and any trading commission your brokerage charges. Most major brokerages charge zero commission on ETF trades, so your only ongoing cost is the expense ratio. Some brokerages may charge a small fee if you trade through a financial advisor, so check your brokerage's fee schedule.

For tax purposes, an XRP ETF is treated like any other ETF. If you hold it in a regular taxable brokerage account, you owe capital gains tax when you sell at a profit. If you hold it in a traditional IRA, you do not owe tax until you withdraw money in retirement. If you hold it in a Roth IRA, you do not owe tax on gains at all, as long as you follow Roth withdrawal rules. The fund may also distribute income to you (though XRP does not pay dividends, so this is unlikely), which would be taxable in a regular account.

Keep records of when you bought the shares and at what price. You will need this information when you sell to calculate your gain or loss for tax purposes.

Selling your XRP ETF shares

Selling works the same way as buying. Log into your brokerage, find the XRP ETF in your holdings, click "Sell," enter the number of shares you want to sell, review the order, and submit it. The sale executes during market hours at the current market price. The cash from the sale appears in your brokerage account within two business days.

If you are selling at a loss, keep your confirmation statement — you may be able to use the loss to offset other investment gains for tax purposes. If you are selling in a taxable account and have held the shares for more than one year, your gain is taxed as a long-term capital gain, which usually has a lower tax rate than short-term gains (shares held one year or less).

Frequently Asked Questions

Can I buy an XRP ETF in an IRA?

Yes. You can hold an XRP ETF in a traditional IRA, Roth IRA, or SEP IRA, just like any other ETF. Open the IRA at your brokerage, fund it, and buy the ETF shares within it. The tax treatment depends on the IRA type: traditional IRAs defer taxes until withdrawal, and Roth IRAs allow tax-free growth if you follow withdrawal rules.

What is the difference between an XRP ETF and buying XRP directly?

An XRP ETF trades on a stock exchange during market hours and is held in a regular brokerage account with SIPC insurance. Buying XRP directly requires a crypto exchange account and a crypto wallet, trades 24/7, and is not SIPC-insured. ETFs are simpler for most investors and work in retirement accounts; direct purchases give you actual control of the cryptocurrency.

Do I pay taxes on XRP ETF dividends?

XRP does not pay dividends, so the fund typically does not distribute income. If it does, you would owe tax on the distribution in a regular taxable account. In an IRA, distributions are not taxed until withdrawal (traditional) or not taxed at all (Roth).

Can I set up automatic purchases of an XRP ETF?

Many brokerages offer automatic investment plans where you can schedule regular purchases of an ETF. Check your brokerage's website or call their customer service to see if they offer this feature and whether there are any fees.

What happens if the XRP ETF closes?

If a fund closes, your brokerage will notify you and typically liquidate your shares at the fund's net asset value, depositing the cash into your account. This is rare for major ETFs, but it can happen if a fund does not attract enough assets. Your shares are protected during this process.