Institutional Investors Eye XRP ETFs as Market Dynamics Shift

A financial expert has asserted that institutions are poised to expand their cryptocurrency investment strategies beyond Bitcoin and Ethereum by incorporating XRP ETFs into their portfolios. This perspective comes in the wake of Franklin Templeton’s recent filing for an XRP exchange-traded fund (ETF), which brings the total number of proposed XRP ETFs to 15.

Linda P. Jones, author of the finance book, “3 Steps to Quantum Wealth,” highlighted this shift, suggesting that institutional investors will look beyond Bitcoin and Ethereum as market dynamics evolve. She contends that recent market trends, including XRP’s strong performance relative to Bitcoin and Ethereum, indicate growing interest in the asset.

Franklin Templeton’s move to file for an XRP ETF has set a new benchmark, with XRP now leading all other cryptocurrencies in ETF filings. The total of 15 proposed XRP ETFs surpasses the number of filings for Bitcoin, which stands at 11, and Ethereum, which has seen only 8 filings.

Some see the surge in ETF applications as an indication of strong demand for institutional XRP investment products. Bitwise CIO Matt Hougan supported this view, stating last month that there is substantial interest in XRP-based investment vehicles.

Despite the increasing XRP ETF applications, skepticism remains regarding whether these products will attract significant investor interest. Scott Melker, host of The Wolf of All Streets, pointed out that the cryptocurrency market has seen a growing number of ETF filings. He suggested that while he is not opposed to this trend, investors might not immediately purchase these products upon their approval.

Melker’s comments reflect broader concerns about demand for crypto ETFs outside Bitcoin. For instance, Ethereum ETFs, launched in July 2024, have experienced relatively low adoption compared to Bitcoin. Since January 2024, Bitcoin ETFs have recorded $35.4 billion in net inflows, while Ethereum ETFs have only seen $2.63 billion since their introduction.

In response to Melker’s doubts, Jones reaffirmed her belief that institutions will diversify beyond Bitcoin and Ethereum, incorporating XRP ETFs into their investment strategies. She noted that XRP has outperformed Bitcoin by 212% since November 2023 and has gained approximately 250% against Ethereum within the same period.

“Institutions will diversify out of Bitcoin/Eth only and add XRP ETFs to their portfolio,” Jones stated, reinforcing her position that institutional investors will embrace XRP ETF products upon launch. Additionally, proponents argue that asset managers do not typically file for ETFs unless there is market demand. Franklin Templeton’s filing and applications from other asset managers suggest that there is already interest in such products.

Besides Franklin Templeton, other notable asset managers who have applied for XRP ETFs include Grayscale, 21Shares, Bitwise, and Canary Capital. ProShares and Volatility Shares have each submitted filings for three XRP ETFs, while Hashdex and Purpose Investments have proposed non-U.S. versions.

With the growing number of XRP ETF filings and increasing discussions surrounding institutional adoption, market analysts continue to assess whether XRP investment products will gain traction similar to Bitcoin ETFs. While skepticism persists, the rising interest from major asset managers suggests that XRP ETFs could soon play a more prominent role in institutional portfolios.