XRP ETF Inflows Hit $1.37 Billion After Month-Long Zero Outflow Streak

Core Insights - The SEC's settlement with Ripple in August 2025 confirmed that XRP secondary market sales are not securities transactions, enabling asset managers to invest without compliance issues [1] - XRP ETFs have seen rapid growth, with cumulative inflows surpassing $1.37 billion by early January 2026, making it the second-fastest crypto ETF to reach this milestone after Bitcoin [4][5] - The demand for XRP ETFs reflects a shift in institutional behavior, characterized by consistent inflows and a lack of redemptions, indicating a structural demand rather than speculative trading [8][9] Market Dynamics - XRP's exchange reserves decreased significantly from 3.76 billion XRP in early October to approximately 1.6 billion by late December, marking a 57% decline, the lowest level since 2018 [2] - The first XRP ETF, Canary Capital's XRPC, launched on November 13, 2025, and attracted $245 million on its debut, with cumulative inflows exceeding $1 billion within four weeks [3] - The consistent inflow of capital into XRP ETFs, even during market volatility, contrasts sharply with Bitcoin and Ethereum, which experienced significant outflows during the same period [15][16] Institutional Behavior - The 35-day streak of zero outflows for XRP ETFs indicates a strong institutional conviction, as pension funds and asset managers deploy capital based on approved mandates rather than short-term price movements [7][8] - The first outflow day occurred on January 7, 2026, with a modest $40.8 million exit, primarily from 21Shares' TOXR, which is negligible compared to the cumulative inflows [11][12] - Institutional demand for XRP is driven by its positioning around Ripple's cross-border payment infrastructure, differing from the more speculative nature of Bitcoin and Ethereum investments [16] Future Projections - Analysts predict various scenarios for XRP's price in 2026, with a bull case estimating prices between $4 and $5, contingent on sustained ETF inflows and continued decline in exchange supply [18][19] - The base case suggests a price range of $3 to $3.50, assuming steady ETF inflows and no major regulatory setbacks [20] - The bear case anticipates a price range of $2 to $2.50, influenced by macroeconomic factors that could limit new ETF allocations [21] - The structural setup favors bullish sentiment due to low exchange reserves and significant XRP locked in ETF custody [22]