Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 33

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 33
---
 of XRP could
also contribute to price volatility, especially if demand fluctuates significantly. Since the supply of XRP is fixed, any significant
surge in demand can result in large price spikes. For example, during periods of high market activity or speculation, the price of XRP
could rapidly increase due to the inability to expand supply to match demand. This volatility could make XRP less predictable for businesses
that rely on it for payments. Digital assets with a flexible supply, such as stablecoins, can adjust to maintain a stable value. XRP,
however, could experience price swings that make it less attractive for everyday transactions or long-term financial planning.

The fixed supply of XRP may
also not scale well with rapidly expanding use cases. As more businesses, financial institutions, and payment providers adopt XRP for
cross-border transactions and other use cases, there is a risk that the fixed supply may not meet the growing demand, leading to supply
shortages and further price volatility. In the case of massive adoption, the scarcity of XRP could raise its value too much, making it
less appealing for day-to-day transactions or use as a liquidity bridge in cross-border payments, as businesses might prefer a more
stable and widely available currency.

<div align='center'>14</div>

The significant holdings of XRP by Ripple Labs and other early stakeholders could have an adverse effect on the market price of XRP.

Ripple Labs holds a large
portion of the XRP supply, which has led to concerns about centralization. Despite escrow mechanisms that gradually release XRP into
the market, Ripple Labs still retains control over a significant portion of XRP, which can impact market dynamics if large amounts are
sold. The concentration of XRP in the hands of Ripple Labs and early stakeholders could affect the market’s confidence in XRP as
a digital asset.

A determination that XRP or any other digital asset is a “security” may adversely affect the price of XRP and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust.

Depending on its characteristics,
a digital asset, including XRP, may be considered to be offered and sold as a “security” under U.S. federal securities
laws. The tests for determining whether a particular digital asset is offered and sold as a “security” are complex and difficult
to apply, and the outcome is difficult to predict. Public, though non-binding, statements by senior officials at the SEC have