XRP Rises to Top Crypto ETF Despite Price Drop to $2

XRP ETFs have seen a notable and sustained influx of capital in recent times, with approximately $756 million attracted over eleven consecutive trading days since their launch on November 13th. This strong demand for the ETFs comes in stark contrast to the price performance of XRP itself, which has declined by approximately 20% over the same period and is currently trading around $2,03 according to CryptoSlate data. This notable disparity has prompted CryptoSlate to take a closer look at the shift in XRP’s ownership structure.

The increasing institutional demand via ETFs and falling prices point to a market absorbing two opposing forces: on the one hand, a steady institutional allocation, and on the other, broader risk reduction. This pattern essentially reflects a complex process in which new, regulated demand enters the ecosystem, while existing holders reconsider their exposure.

XRP leading crypto ETF inflows

The inflow of XRP products has been statistically notable, especially in the context of net exits elsewhere in the market. During the reporting period, we saw Bitcoin ETFs saw over $2 billion in outflows, while Ethereum products saw nearly $1 billion in withdrawals. Even the typically successful competitors like Solana have only managed to achieve around $200 million in cumulative inflows. In this light, XRP stands alone in terms of consistent accumulation, with four products now representing around 0,6% of the token’s total market cap.

Demand for XRP ETFs is attributed to the operational efficiency of these products. They offer institutional investors a compliant and accessible way to invest in the asset, without the custodial management headaches and risks of direct token trading. However, the absence of a corresponding price increase suggests that other segments of the market may be reducing their exposure or managing risk amid heightened macroeconomic and crypto-specific uncertainty. This phenomenon is not uncommon in the crypto market, but the scale at which it is occurring is notable.

The selling pressure appears to stem from a combination of early investors taking profits after years of volatility and potential treasury activity. The ETF boom has essentially created a liquidity bridge, allowing large-scale entities to unwind their positions without immediately disrupting order books.

Risk of centralization beneath the surface

An examination of the asset’s ownership structure confirms the impression that it is undergoing significant centralization. Data from blockchain analytics firm Santiment shows that the number of “whale” and “shark” wallets, each holding at least 100 million XRP, has declined by 20,6% over the past eight weeks. This shift towards fewer large wallets holding more total XRP can be interpreted differently. Some market observers are viewing this as “consolidation,” arguing that supply is shifting to “stronger hands.” However, a risk-adjusted approach points to increasing centralization risk.

With nearly half of the available supply concentrated in a shrinking group of entities, the market's liquidity structure is declining. This centralization of supply makes future price action highly dependent on the decisions of just a few dozen entities. If this group decides to distribute, it could result in a severe liquidity shock. At the same time, we see balances on spot exchanges shrinking as tokens move toward regulated custody solutions from ETF issuers. While this theoretically reduces float for retail trading, it has not yet resulted in a supply shock. Instead, the transfer from exchange to custodian appears to be a one-way street for now, with the circulating supply being absorbed by the shrinking "whale" cohort.

These sustained inflows have reignited the debate over which asset can emerge as the benchmark altcoin for institutional portfolios. Historically, regulated crypto exposure has been almost exclusively focused on Bitcoin and Ethereum, with other assets receiving minimal attention. XRP’s recent inflow profile, which has significantly outpaced the cumulative inflows into other altcoin ETFs, has temporarily shifted this dynamic.

Some of the interest stems from developments around Ripple, including its license expansions in Singapore and the significant adoption of RLUSD, its dollar-backed stablecoin, which offers institutions a broader ecosystem to evaluate. At the same time, Ripple’s strategy of acquisitions across custody, brokerage, and treasury management has created a vertically integrated framework that resembles parts of the traditional financial infrastructure, providing a strong foundation for regulated participation. Still, analysts caution that a short period of inflows will not establish a new long-term benchmark. XRP will need to attract sustained demand through multiple market phases to maintain its position against peers like Solana, which has stood out for its increasing tokenization activity, as well as against assets that potentially attract larger inflows as new ETFs are launched.

For now, XRP’s performance within the ETF complex reflects early momentum rather than structural dominance. The inflows highlight genuine institutional interest, but the asset’s price behavior reflects the broader challenges facing major cryptocurrencies amid macroeconomic uncertainty.

Frequently Asked Questions

How do ETF influences affect the price of XRP?
The increasing inflow into XRP ETFs indicates growing institutional interest. However, the opposite price action suggests that risk management is also taking place by other investors, complicating the supply and demand dynamics.

What does XRP centralization mean for investors?
The centralization of XRP ownership could lead to increased vulnerability in the liquidity structure, as price movements become more dependent on the decisions of a handful of large players. This could present both opportunities and risks for investors.

Is XRP Ready to Become a Benchmark Altcoin?
While XRP is currently attracting significant inflows, long-term recognition as a benchmark altcoin will require combining that interest with a sustainable price level and proven usage across multiple market cycles.