XRP ETF Inflows Surge Past $1.5 Billion As Bitwise Records Initial Outflow

• Spot XRP ETFs recorded their first net outflow since July 8, with the Bitwise XRP ETF reporting $3.58 million in redemptions on Aug. 5.
• Cumulative inflows into US-listed XRP ETFs have surpassed $1.5 billion, signaling sustained institutional demand despite the token underperforming its larger-cap peers.
• Bitwise simultaneously shifted capital into its Bitcoin and Ethereum ETFs, reflecting a broader market rotation as Bitcoin and Ethereum recover while XRP lags.
• XRP trades near $1.07, constrained by technical resistance, though whale activity and stablecoin expansion on the XRP Ledger suggest underlying accumulation.

Spot XRP exchange-traded funds experienced their first net outflow since July 8 on Aug. 5, recording $3.58 million in redemptions from the Bitwise XRP ETF. The entire withdrawal originated from Bitwise, while all other U.S. spot XRP ETFs reported neutral flows on the same day. This single-day event has drawn attention from market participants, though it does not necessarily indicate a systemic shift in institutional sentiment toward the asset. Despite the outflow, cumulative demand for XRP ETFs remains robust, with total net inflows reaching $1.51 billion and assets under management standing at $993.38 million.

The redemption activity at Bitwise is best understood within the context of its broader portfolio strategy. While its XRP ETF experienced outflows, the firm attracted nearly $12 million into its other major crypto products. Specifically, Bitwise's Bitcoin ETF (BITB) attracted $10.56 million, and its Ethereum ETF added $1.37 million. This divergence highlights a clear rotation of capital from XRP into larger-cap cryptocurrencies as Bitcoin and Ethereum recover, while XRP lags in performance. The shift aligns with broader market trends where Bitcoin and Ethereum ETFs saw significant inflows, driven by strong institutional demand and momentum.

Historical data supports the interpretation that ETF outflows do not necessarily reflect a bearish stance by the sponsor. The Bitwise XRP ETF creates and redeems shares in blocks of 10,000, settling either through in-kind transfers of XRP to authorized participants or cash sales. This mechanism means that redemptions often result from routine portfolio rebalancing or liquidity needs by specific investors rather than a lack of confidence in the underlying asset. During the first quarter, the trust sold approximately 9.73 million XRP and delivered 2.69 million XRP in-kind for redemptions, yet the total holdings increased from 131.22 million to 194.90 million by year-end. By Aug. 4, holdings had risen further to 293.93 million XRP, indicating that cumulative inflows have significantly outweighed outflows throughout 2026 .

Why Is XRP Underperforming Bitcoin And Ethereum?

The divergence in flows aligns with recent price performance and market dynamics. Bitcoin traded around $64,830, up 1.2% over 24 hours, while Ethereum rose 2.35% to $1,911. In contrast, XRP fell 1.10% to $1.05, underperforming its peers. Year-to-date, XRP is down approximately 43%, compared to declines of 26% for Bitcoin and 36% for Ethereum. This performance gap likely contributed to the capital rotation observed in Bitwise's portfolio, as investors favored assets with stronger momentum and larger market caps. While the Bitwise product experienced a year-to-date NAV return of minus 41.70%, a single day's redemption activity is insufficient to establish a bearish trend .

Technical indicators further illustrate XRP's constrained price action. The token trades near $1.07, holding above the $1.40 support level but remaining below key moving averages, including the 50-day EMA at $1.81. This configuration indicates a bearish trend that caps rebounds, although contracting red histogram bars on the MACD suggest bearish momentum is easing. The token remains constrained between $1.00 support and $1.25 resistance, with potential for recovery toward the $1.54 resistance if retail interest continues to stabilize. However, the derivatives market shows reduced liquidation pressure, with futures open interest stabilizing at $2.50 billion.

What Is Driving Institutional Accumulation Despite Price Lag?

Despite the price lag, institutional players continue accumulating via whale withdrawals and expanding utility on the XRP Ledger. Whales account for roughly 55% of Binance withdrawals, suggesting accumulation ahead of potential regulatory clarity from the U.S. CLARITY Act. This institutional buildup coincides with Ripple’s expansion of its RLUSD stablecoin, which saw $133 million minted in a single day. Additionally, there has been a 25% increase in wallets holding tokenized real-world assets on the XRP Ledger, indicating a strategic shift toward using the ledger as a settlement layer for tokenized instruments rather than just a payments rail .

Wall Street estimates from JPMorgan and Standard Chartered suggest that XRP ETF inflows could reach $4 billion to $8 billion, potentially rivaling larger crypto ETF launches. This projection highlights the significant potential for capital influx into the asset class, even as immediate price action remains subdued. The combination of stablecoin growth, tokenization trends, and sustained ETF inflows suggests that the current market conditions reflect a period of consolidation rather than a lack of fundamental interest. As Bitcoin and Ethereum continue to attract capital, XRP may benefit from its unique position in the institutional settlement landscape, provided it can overcome current technical headwinds .

The stability in derivatives markets and the continued accumulation by large holders indicate that the market is not in a panic state. Instead, it reflects a nuanced environment where investors are selectively rotating capital based on performance and momentum. For XRP, the challenge lies in breaking through key resistance levels to attract broader retail and institutional participation. The ongoing expansion of the XRP ecosystem, including stablecoin minting and tokenization, provides a strong fundamental backdrop that may support future price appreciation as regulatory clarity improves .