XRP ETFs Outpace BTC/ETH in Institutional Adoption: The Case for XRP as the Next Institutional-Grade Crypto Asset

In late 2025, a seismic shift is unfolding in the institutional crypto landscape. While Bitcoin and Ethereum ETFs struggle with outflows, XRP ETFs are surging ahead, accumulating nearly $887 million in assets under management and recording daily net inflows of $12.84 million as of December 5. This rapid institutional adoption of XRP is not just a short-term trend-it signals a fundamental reevaluation of how institutional investors perceive crypto assets. With XRP locking over 400 million tokens in ETFs, a regulated stablecoin (RLUSD) gaining traction, and on-chain activity reflecting strategic accumulation, XRP is emerging as the next institutional-grade crypto asset.

XRP ETFs: A New Benchmark for Institutional Capital

The explosive growth of XRP ETFs contrasts sharply with the mixed performance of Bitcoin and Ethereum products. While Bitcoin ETFs saw over $2 billion in outflows and Ethereum ETFs lost nearly $1 billion during the same period, XRP ETFs have maintained a streak of 11 consecutive days of inflows, accumulating $756 million since their November 13 launch. This divergence is driven by XRP's unique value proposition: a settlement asset with real-world utility, backed by Ripple's regulatory progress and RLUSD's institutional-grade infrastructure.

Franklin Templeton's entry into the XRP ETF market has been a pivotal catalyst. The firm's XRPZ ETF, launched on November 24, attracted $132.3 million in net inflows, reflecting broader institutional confidence. Sandy Kaul, Franklin Templeton's Head of Digital Asset & Industry Advisory Services, emphasized that XRP is "foundational to global settlement infrastructure," a sentiment echoed by other asset managers who launched nine XRP ETFs within 10 days in late November. This coordinated institutional push positions XRP as a benchmark altcoin for portfolios seeking exposure to regulated, utility-driven assets.

RLUSD and Ripple's Infrastructure: The Institutional Backing

Ripple's RLUSD stablecoin has further solidified XRP's institutional appeal. With a circulating supply exceeding $1 billion on Ethereum, RLUSD is recognized as an "Accepted Fiat-Referenced Token" by Abu Dhabi's Financial Services Regulatory Authority (FSRA), enabling its use in settlements, collateral, and lending. Backed 1:1 by U.S. cash and short-term Treasuries, RLUSD offers institutional investors a compliant, low-volatility asset that complements XRP's settlement capabilities.

Ripple's strategic expansion into institutional finance has also accelerated adoption. The acquisition of Hidden Road and the launch of Ripple Prime - a crypto-owned global prime brokerage - have tripled activity in XRP-based liquidity and stablecoin collateral. These moves, combined with partnerships like the Gemini credit card settlement pilot with Mastercard and WebBank, demonstrate XRP's role in real-world financial infrastructure. Analysts project that RLUSD's market cap could surpass $1.2 billion by late 2025, driven by cross-border payments and tokenized assets.

On-Chain Activity: A Tale of Institutional Confidence

On-chain data underscores XRP's institutional-grade status. Over 300 million XRP tokens are now held by ETFs, reducing liquidity on traditional exchanges and amplifying price volatility. This concentration of holdings reflects a strategic repositioning by institutional investors, with 78 new whale accounts accumulating 77.32 million XRP in a single day. Meanwhile, the shrinking liquidity pool has made even modest trades capable of triggering sharp price swings - hourly fluctuations of 12-18% have been observed.

The SEC's August 2025 settlement with Ripple, which resolved the $125 million case, further catalyzed institutional interest. XRP surged 11% post-settlement, signaling renewed confidence in its regulatory clarity. This legal certainty, combined with XRP's utility in cross-border payments and RLUSD's adoption, has created a flywheel effect: institutional investors are allocating capital to XRP ETFs not as speculative bets, but as macroeconomic plays.

Conclusion: XRP as a Strategic Allocation

The institutional adoption of XRP ETFs is not a fleeting trend but a structural shift. With $12.84 million in daily inflows, a regulated stablecoin, and a shrinking liquidity pool that amplifies institutional influence, XRP is redefining what it means to be an institutional-grade asset. As Franklin Templeton and other firms continue to integrate XRP into their offerings, the token's role in global settlements and financial infrastructure will only grow. For investors seeking exposure to crypto's next phase, XRP ETFs represent a compelling case: a regulated, utility-driven asset with institutional backing and a clear path to mainstream adoption.