The XRP ETF Launch Race: Institutional Demand and Supply Constraints Set the Stage for a Major Price Re-rating

Regulatory Momentum: A Paradigm Shift

The SEC's recent actions have marked a pivotal shift in its approach to XRP. Previously embroiled in a legal battle with Ripple Labs, the agency now appears to treat XRP as a commodity, akin to Bitcoin and Ethereum. This reclassification has streamlined the approval process for XRP ETFs, with the SEC reducing review periods from 240 days to 75 days. For instance, 21Shares' XRP ETF filing on November 7, 2025, triggered a 20-day automatic effectiveness clock, potentially allowing the product to launch by November 27 if unchallenged. Similarly, Franklin Templeton's fast-track S-1 filing under Section 8(a) aims for late November approval. These developments reflect a broader regulatory thaw, which could legitimize XRP as an institutional asset class.

Institutional Demand: A Surge in Capital Inflows

The institutional appetite for XRP is unprecedented. Canary Capital's XRPC ETF, the first U.S. spot XRP ETF, debuted with $58 million in trading volume and $245 million in net inflows on its first day. Steven McClurg, CEO of Canary Capital, has projected up to $5 billion in inflows within the first month, underscoring robust demand. Other major players, including Bitwise, 21Shares, and Franklin Templeton, are poised to follow, with analysts estimating that seven XRP ETFs could collectively attract $700 million in their initial sessions.

This institutional rush is not merely speculative. The XRPC ETF's performance has already outpaced Bitcoin and Solana-based ETFs in its debut, suggesting that XRP's unique value proposition-particularly its role in cross-border payments-resonates with institutional investors. Moreover, the SEC's streamlined approval process has created a "race to launch", with firms leveraging the 20-day automatic effectiveness rule to expedite market entry.

Supply Constraints: A Catalyst for Price Re-rating

While demand is surging, XRP's supply dynamics are equally compelling. Over 149 million XRP ($336 million) was withdrawn from centralized exchanges within 24 hours, signaling large-scale institutional accumulation. This trend is further amplified by ETFs, which lock up XRP in regulated vehicles, effectively reducing circulating supply. For example, the $343 million transfer from a newly activated BitGo wallet has fueled speculation about ETF-related positioning.

The interplay between demand and supply could drive a re-rating. A speculative scenario projecting $600 million in monthly inflows across seven ETFs for one year would inject $7.2 billion into the XRP market. Under a 100× inflow multiplier, this could hypothetically push XRP's market capitalization to $857 billion, translating to a price of $14.20 per token. However, historical precedents, such as Ethereum ETFs, caution that inflows do not guarantee price appreciation. Ethereum's $14.7 billion in net inflows over 12 months failed to sustain a price rally due to macroeconomic headwinds and supply-side dynamics.

Risks and Realities

Despite the optimism, risks persist. Whale selling activity-exemplified by 200 million XRP offloaded in 48 hours-has introduced volatility, pushing the token below $2.30 at times. Additionally, the SEC's final stance remains uncertain, and regulatory pushback could delay approvals. Furthermore, macroeconomic factors, such as interest rate cycles and broader market sentiment, will influence XRP's trajectory.

Conclusion: A Tipping Point for XRP

The XRP ETF launch race represents a tipping point for Ripple's token. Regulatory clarity, institutional adoption, and supply constraints are converging to create a compelling case for a price re-rating. While challenges remain, the potential for XRP to reach $2.50–$3 by late 2025-and beyond-has gained credibility. Investors must weigh the risks of volatility and regulatory uncertainty against the transformative potential of a regulated, institutional-grade XRP market.