First Daily Outflows Hit XRP ETFs As Nearly $600 Million Leaves General Market

XRP spot exchange-traded funds (ETFs) recorded their first daily outflows since their November 2025 debut, with nearly $41 million leaving on Wednesday. This marked a reversal from a steady inflow trend that added about $1.23 billion to XRP ETFs since launch. The outflow suggests a shift in investor sentiment amid broader uncertainty in the cryptocurrency market.

Bitcoin and Ethereum ETFs also saw outflows on Wednesday, with Bitcoin ETFs losing $486 million and Ethereum ETFs shedding $98.5 million. The synchronized nature of the outflows suggests strategic repositioning across portfolios rather than a sudden loss of confidence in the underlying assets.

Market sentiment has turned cautious, with the Crypto Fear & Greed Index standing at 42, indicating a fear-driven environment. This marks a departure from early-year optimism that had fueled the recent rally in major crypto assets.

Why Did This Happen?

XRP ETFs had previously seen inflows surge to $46 million on Monday from $13.6 million on Friday. However, the momentum slowed to a net outflow of $41 million by Wednesday. This suggests a temporary cooling of demand, possibly driven by profit-taking and market volatility. XRP ETFs are still up nearly $1.2 billion in cumulative inflows since their debut.

Bitcoin ETFs saw the largest outflow in the sector, with $486 million leaving on Wednesday, a significant shift from the $679 million in inflows recorded the previous day. Fidelity's FBTC led with nearly $248 million in outflows, followed by BlackRock's IBIT with $130 million.

How Did Markets React?

The broader cryptocurrency market has been in a choppy range, with Bitcoin trading around $90,000, a significant drop from its weekly high of $94,789. The drop was accompanied by weakening technical indicators, with the RSI declining to the midline at 50 on the daily chart.

Ethereum also faced headwinds, trading under pressure as the RSI approached the midline at 61, indicating fading bullish momentum. Ethereum ETFs had been on a three-day inflow streak before turning negative on Wednesday, with a total of $115 million in outflows.

The XRP price has been particularly affected, with the token correcting from a weekly high of $2.42 to trade at $2.24. The bearish movement pushed XRP below the 100-day EMA at $2.23, with further decline likely to be contained by the 50-day EMA at $2.07.

What Are Analysts Watching Next?

On-chain data provides additional context. Whale activity to exchanges like Binance has declined since mid-December, signaling reduced selling pressure. While whale flows are still high at about 60%, this is down from above 70% in late 2024. Retail activity, however, remains stable.

Analysts are also watching the Ripple v. SEC lawsuit outcome, which could determine whether XRP is classified as a security. WisdomTree had previously withdrawn its XRP ETF application, citing regulatory uncertainty, a decision that analysts say was strategic and not a permanent setback.

The path forward for XRP ETFs depends on two key factors: the final ruling in the Ripple case and the approval of a spot Bitcoin ETF by the SEC. A positive resolution for XRP and a successful launch of a Bitcoin ETF could set a regulatory precedent for altcoin ETFs. Until then, asset managers are likely to remain cautious.

Investor behavior suggests a market in consolidation rather than outright panic. Large XRP transactions have surged to a three-month high, indicating positioning rather than a directional bet. This supports the view that the market is digesting gains and waiting for clarity from regulatory and legal developments.

The next key event to watch is the resolution of the Ripple v. SEC case, which could either remove a major regulatory hurdle or reinforce it. Until then, XRP ETFs and the broader market are likely to remain in a wait-and-see mode, with inflows and outflows continuing to reflect the uncertainty.