Is XRP's Coiled Spring About to Unwind?

The U.S. Securities and Exchange Commission's (SEC) August 2025 settlement with Ripple Labs marked a watershed moment. By dropping its appeal and accepting a $50 million penalty, the agency effectively removed a decade-long cloud of legal ambiguity. This resolution allowed institutions to engage with XRP without fear of regulatory reprisal, catalyzing the launch of seven spot XRP ETFs in November 2025. These ETFs attracted $1.14 billion in assets within six weeks, a figure that swelled to $1.3 billion in 50 days, with 43 consecutive days of positive inflows.

The regulatory tailwinds extended beyond the SEC. The passage of the GENIUS Act in July 2025 further solidified XRP's institutional appeal. By defining "payment stablecoins" and mandating 1:1 reserve backing, the Act created a framework that legitimizes Ripple's RLUSD stablecoin, which reached a $1.3 billion market cap in 2025. This regulatory clarity has not only reduced counterparty risk but also positioned XRP as a bridge asset in cross-border settlements, a role that is increasingly attractive to ESG-conscious investors given the XRP Ledger's energy efficiency 99.99% less per transaction than Bitcoin.

Institutional Accumulation: A Mandate-Driven Surge

The most striking evidence of XRP's institutional adoption lies in the ETF inflows. In December 2025 alone, XRP ETFs absorbed $483 million, a stark contrast to Bitcoin and Ethereum ETFs, which saw outflows of $1.09 billion and $564 million, respectively. This divergence highlights a critical shift: institutions are allocating capital to XRP not as a speculative bet but as a utility-driven asset.