XRP spot ETFs have demonstrated one of the most consistent inflow sequences this quarter, bringing in approximately $756 million over eleven consecutive trading sessions since their launch on Nov. 13.
However, the robustness of ETF demand starkly contrasts with XRP’s price performance.
According to CryptoSlate’s data, the token has experienced a decline of about 20% during the same timeframe and currently trades around $2.03.
This divergence has led CryptoSlate to investigate the evolving ownership structure of XRP.
The significant ETF inflows, juxtaposed with falling prices, indicate a market grappling with two opposing dynamics: steady institutional investment versus broader risk aversion.
Essentially, this trend suggests a more intricate process where new, regulated demand enters the ecosystem as existing holders recalibrate their exposure.
XRP dominates crypto ETFs flow
The inflow profile for XRP products is statistically exceptional, especially against a backdrop of net outflows observed elsewhere.
During this period, Bitcoin ETFs faced over $2 billion in outflows, while Ethereum products experienced nearly $1 billion in withdrawals.
Even top competitors like Solana have only achieved around $200 million in cumulative inflows. Simultaneously, other altcoin ETFs have attracted smaller amounts, with Dogecoin, Litecoin, and Hedera products collectively managing between $2 million and $10 million.
In this landscape, XRP stands out for its consistent accumulation, with the four products now representing about 0.6% of the token’s total market cap.
Nonetheless, the lack of upward price movement from these inflows implies that other segments of the market may be reducing exposure or managing risk amidst heightened macro and crypto-related uncertainties.
This situation isn’t new in the crypto world, but the scale involved here is noteworthy.
The selling pressure is likely a result of a mix of early adopters cashing out after years of volatility and potential treasury reallocations. The ETF surge has effectively established a liquidity bridge, facilitating large-scale entities to offload positions without immediately disrupting the order book.
Consolidation or centralization risk?
Meanwhile, ownership data indicates that the asset is undergoing significant centralization.
Data from the blockchain analytics firm Santiment reveals that the number of wallets categorized as “whales” and “sharks” holding at least 100 million XRP has decreased by 20.6% over the past eight weeks.
This trend of fewer high-capacity wallets with an increasing aggregate of assets can be interpreted in various ways.
Some market analysts have labeled this as “consolidation,” suggesting that the supply is transitioning into “stronger hands.”
Conversely, a risk-adjusted perspective points towards escalating centralization risks.
With nearly half of the available supply held by a shrinking group of entities, the market’s liquidity profile is becoming increasingly delicate.
This concentration of supply implies that any future price movements will be heavily reliant on the choices of a limited number of entities. If this group opts to distribute, the resulting liquidity disruption could be substantial.
At the same time, spot exchange balances are dwindling as tokens migrate to the regulated custody solutions mandated by ETF issuers.
While this theoretically diminishes the “float” accessible for retail trading, it hasn’t instigated a supply shock. Rather, the shift from exchange to custodian seems to be a one-way street, absorbing circulating supply sold by the diminishing whale cohort.
The benchmark race
The inflow trajectory has rekindled discussions about which asset could become the benchmark altcoin for institutional portfolios.
Traditionally, regulated exposure to crypto has focused almost entirely on Bitcoin and Ethereum, with other assets receiving minimal attention. XRP’s recent flow pattern, which has notably surpassed the cumulative inflows of other altcoin ETFs, has temporarily disrupted this trend.
Part of the interest arises from developments surrounding Ripple. The company’s licensing expansion in Singapore and the substantial adoption of RLUSD, its dollar-pegged stablecoin, provide institutions with a broader ecosystem to assess.
Moreover, Ripple’s acquisitions in the areas of custody, brokerage, and treasury management have created a vertically integrated framework resembling components of traditional financial systems, thereby laying a foundation for regulated participation.
Nonetheless, analysts warn that a short-lived inflow streak does not establish a new long-term standard.
XRP must sustain demand across different market phases to solidify its position against competitors like Solana, which has gained traction due to its increasing tokenization activities, and against assets that could see larger inflows once new ETFs are launched.
Currently, XRP’s performance within the ETF landscape points to early momentum rather than firm structural dominance.
The inflows signify genuine institutional interest, yet the asset’s price dynamics reflect the overarching challenges that large-cap cryptocurrencies encounter in the face of macroeconomic uncertainty.
