XRP’s spot ETFs are sucking in roughly $50 million a day in fresh capital, hitting nearly $1 billion in inflows in under four weeks, the fastest adoption pace since Ethereum ETFs launched.
Yet the token itself has cratered 11% over the past ten days and sits near $1.72, well below the $2.00 psychological support that the market has been watching.
The divergence reveals something important about how institutional money actually flows into crypto and why on-chain buying pressure doesn’t always translate into immediate price support.
The story matters because it forces a reckoning with how modern crypto markets work.
ETF inflows can signal long-term institutional conviction, but they don’t guarantee short-term price lifts.
Understanding the gap between the two is crucial for investors trying to figure out whether XRP is being accumulated on weakness or simply trapped in a bearish technical pattern that no amount of institutional dry powder can reverse.
ETF demand grows, but why XRP price following?
Spot XRP ETFs launched barely three weeks ago with Franklin Templeton, Grayscale, and Bitwise leading the charge.
Since inception, they’ve racked up roughly $1 billion in net inflows spread across 20 consecutive trading days.
For context, that absorption rate rivals what Bitcoin and Ethereum ETFs saw in their first months, signaling that Wall Street’s appetite for regulated crypto exposure remains robust.
But here’s the wrinkle: ETF inflows don’t automatically move the spot price higher.
The mechanics are more subtle. When you buy an XRP ETF, authorized participants, large trading firms that sit between you and the underlying market, either deliver XRP they already own from inventory or source it through their existing hedges.
Many of these firms hedge their long ETF positions by simultaneously shorting XRP derivatives or selling it in spot markets to neutralize risk.
That hedging pressure can easily offset the upside from institutional demand flowing through the ETF, leaving the price stuck or even under pressure.
The timing lag matters too. ETF inflows take days to settle and clear.
During that window, derivatives traders and high-frequency algorithms often front-run the flows, causing price spikes that reverse once the actual capital lands.
By the time the dust settles, much of the inflow’s bullish impact has already been priced in and sold into.
The structural reality
The redemption mechanism was supposed to keep ETF prices glued to spot prices through arbitrage.
And it does, the spreads are tight. But that same mechanism can act as a pressure valve for sellers.
When XRP’s spot price weakens on technical selling or macro sentiment, market makers have no reason to keep buying expensive inventory to feed the ETF creation machine.
They step back. Meanwhile, holders who panic-sold XRP in spot markets did so before the ETF inflows even arrived to support prices. Add to that a tougher macro backdrop.
Bitcoin and Ethereum have also pulled back recently, taking the broader crypto risk asset bid with them.
Hedge funds and CTA funds that were long XRP derivatives ahead of the ETF launch have been trimming positions at losses.
That forced selling in leveraged markets can overwhelm any structural bid from slow-moving institutional ETF inflows.
The on-chain data tells the story clearly: XRP exchange balances have fallen 45% over two months as holders moved tokens into private wallets and custody.
But that doesn’t mean prices rise immediately. Supply tightening usually precedes rallies by weeks or months.
The Bottom Line XRP ETF inflows are real and represent genuine institutional buying interest. But they’re not a price-support floor in the short term.
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