XRP's Institutional Accumulation and Impending Supply Shock

The institutionalization of XRP has reached a critical inflection point, driven by a confluence of regulatory clarity, aggressive ETF product design, and a rapidly shifting liquidity landscape. With cumulative net inflows exceeding $643 million in just one month, XRP ETFs are not merely attracting capital-they are restructuring the token's supply dynamics in ways that could force a dramatic price acceleration within months.

ETF-Driven Structural Shifts in XRP Liquidity

The launch of U.S. spot XRP ETFs in late 2025 has catalyzed a surge in institutional demand, with over 339 million XRP (0.34% of the circulating supply) now held in ETF vaults. This represents a fundamental shift in XRP's market structure, as large institutional investors systematically move tokens into custodial storage rather than holding them on exchanges. For context, Franklin Templeton's XRP ETF alone disclosed holdings of 32.04 million XRP by November 25, while Grayscale and Bitwise products have similarly attracted significant inflows.

These movements are shrinking XRP's liquid supply on public exchanges. As of November 26, 2025, over 339 million XRP are locked in ETFs, reducing the amount available for trading and exacerbating liquidity constraints. This trend mirrors Bitcoin's ETF-driven dynamics in 2024, where institutional accumulation outpaced on-chain trading activity. The result is a tightening of supply in public markets, creating a self-reinforcing cycle where reduced liquidity drives higher demand for remaining exchange-held XRP.

Projected $4.3 Billion 90-Day Demand Surge

Analysts project that XRP ETFs could see $4.3 billion in institutional demand over the next 90 days, a figure derived from current inflow trajectories and the aggressive fee strategies of ETF providers according to market analysis. Franklin Templeton's 0.19% sponsor fee-fully waived on the first $5 billion in assets-has positioned XRP as the most competitive altcoin investment vehicle, attracting capital at a pace outstripping even Bitcoin and Ethereum ETFs in early 2024.

This demand is not speculative but structural. XRP's role in cross-border payment systems and its post-SEC settlement regulatory clarity have made it a "must-have" asset for institutional portfolios. By November 28, XRP ETFs had already reached $801.7 million in AUM, with projections suggesting they could cross $1 billion in their first month and $6.7 billion within a year according to analysts. Such growth implies that institutional buyers will soon exhaust OTC reserves and exchange-held balances, forcing them to compete for XRP in public markets-a scenario that historically drives sharp price increases.

Impending Supply Shock and Price Acceleration

The shrinking of XRP's exchange balances and OTC reserves is accelerating faster than anticipated. With 0.34% of the circulating supply already locked in ETFs, and inflows showing no signs of slowing, the remaining liquidity pool is becoming increasingly strained. This dynamic is amplified by XRP's unique supply mechanics: unlike Bitcoin, which has a fixed supply, XRP's circulating supply is capped at 50 billion tokens, with a significant portion held in escrow or institutional custody according to market analysis.

As OTC reserves deplete, public markets will become the primary source for institutional buyers, creating a supply shock akin to the 2024 Bitcoin ETF rally. XRP's price resilience-trading near $2.18 despite broader crypto weakness-suggests that market participants are already pricing in this inevitability. However, the final phase of this transition-when OTC reserves are fully tapped-could trigger a parabolic move as buyers are forced to bid up prices in a constrained liquidity environment.

Conclusion: A Structural Bull Case

XRP's institutional adoption is no longer a theoretical possibility but an ongoing reality. The combination of regulatory clarity, aggressive ETF product design, and shrinking liquidity pools has created a bull case driven by structural forces rather than speculative sentiment. With projected $4.3 billion in 90-day demand and exchange balances dwindling, the next phase of XRP's price action will likely be defined by a scarcity-driven surge as institutional buyers outstrip available supply. For investors, the key takeaway is clear: the market is already pricing in a future where XRP's liquidity constraints become its most powerful catalyst.