XRP News Today: XRP ETFs Fuel $666M Inflows as Liquidity Thins, Volatility Spikes

XRP is poised for a pivotal week as institutional demand, driven by a wave of newly launched exchange-traded funds (ETFs), accelerates its transition into a mainstream asset. The staggered rollout of XRP ETFs-led by 21Shares, Franklin Templeton, Grayscale, and Bitwise-has created a sustained tailwind for the token, with cumulative inflows exceeding $666 million since mid-November. This momentum has already pushed XRP's price to a 12% weekly gain, despite broader market volatility, as institutional buyers seek exposure to the fourth-largest cryptocurrency according to market analysis. The 21Shares XRP ETF (TOXR), launching December 1, marks the first such product from a European issuer to enter the U.S. market, leveraging the firm's dominance in crypto ETPs to capture a share of the growing institutional appetite according to market analysis.

The ETF-driven demand is reshaping XRP's market structure. Unlike Bitcoin, where 11 spot ETFs launched simultaneously in 2024, the staggered XRP ETF introductions have created continuous catalysts, with each approval attracting fresh media attention and institutional buyers. This dynamic has allowed XRP to avoid the consolidation phase seen after Bitcoin's ETF debut, instead maintaining upward pressure through overlapping inflows. Franklin Templeton's XRPZ and Grayscale's GXRP, for instance, recorded $3 million and $164 million in first-day inflows, underscoring the sector's robustness.

However, the surge in ETF activity has also disrupted traditional liquidity dynamics. Billions of XRP tokens have migrated from exchanges like Binance and Kraken into ETF custodial wallets, reducing on-exchange liquidity and amplifying price volatility. Analysts note that smaller trades such as $15 million orders now trigger 12-18% hourly price swings, a stark contrast to the pre-ETF era. This liquidity shift mirrors patterns observed in Bitcoin and Ethereum ETFs, where arbitrage mechanisms stabilize prices despite thin exchange volumes. Yet, for XRP, the thinning liquidity layer has introduced a new layer of unpredictability, with daily trading volumes on centralized platforms contracting to below $1 billion.

The limited supply of XRP available for ETFs further complicates the market. With ETFs already holding over 300 million XRP and OTC liquidity rapidly depleting, analysts warn of an impending supply crunch. Jake Claver of Digital Ascension Group estimates that ETFs have absorbed 800 million XRP from private liquidity channels in just a week, forcing them to increasingly rely on public exchanges for acquisitions. This transition could trigger sharp price spikes, as seen in a recent Kraken anomaly where XRP briefly hit a price of $91. Ripple's escrow reserves, which hold 34.7 billion XRP, remain off-limits to ETFs under U.S. regulatory constraints, exacerbating the supply challenge.

On-chain data reveals a parallel reshuffling among XRP's largest holders. Whale wallets have redistributed holdings, with 78 new accounts accumulating 77.32 million XRP in a single day while 78 existing wallets offloaded over 108.5 million tokens. This rotation suggests a strategic repositioning ahead of potential price inflections, as major investors balance between accumulation and distribution according to on-chain analysis. Meanwhile, ETF inflows have pushed XRP's market capitalization to $135 billion, solidifying its status as a top-tier digital asset.

The coming weeks will test XRP's resilience as ETF demand intersects with dwindling liquidity and whale activity. Analysts project that XRP ETFs could reach $6.7 billion in assets under management within a year, mirroring Bitcoin's early ETF trajectory. Yet, the token's path to $5 remains fraught with volatility, as structural shifts in liquidity and supply dynamics create a volatile but potentially lucrative environment for investors.