XRP Rallies to 2-Month High on ETF Inflows and Short Squeeze

Generated by AI AgentCoinSageReviewed byAInvest News Editorial Team
Wednesday, Jan 7, 2026 7:44 am ET1min read
XRP
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Aime RobotAime Summary

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XRP
surged to a two-month high above $2.40 amid ETF inflows and crypto short liquidations, marking a 25% YTD rally.

- Despite regulatory wins, XRP fell 48% from its July 2025 peak due to delayed SEC rulings, late ETF launches, and stalled legislation.

- Ripple's $2.7B firm acquisitions and new privacy-focused tech aim to expand XRP's utility beyond payments into institutional DeFi.

- Leadership changes and partnerships with Mastercard/BNY Mellon highlight Ripple's strategy to bridge blockchain with traditional finance.

XRP (XRP) surged to a two-month high above $2.40 on Wednesday, extending its 2026 rally to over 25% year-to-date.

According to market data
The token's gains come amid strong inflows into spot exchange-traded funds (ETFs) and a wave of short liquidations across the crypto market.
Market analysis shows
Trading volumes doubled to $9 billion as investors rotated into large-cap altcoins, reflecting broader risk-on sentiment.
According to reports
Still, the rally contrasts with a steep 48% decline from its July 2025 peak despite major regulatory victories.
As reported

What's Driving XRP's Recent Rally?

XRP climbed 11% in 24 hours as short sellers were forced out of losing positions, mirroring broader crypto market liquidations exceeding $500 million.

According to market data
Spot
XRP
ETFs recorded $46.1 million in fresh inflows on Monday, maintaining a 30-day streak without outflows since their November 2025 launch.
According to reports
Adam Morgan McCarthy of Kaiko linked the price action to improved liquidity from ETF products and favorable market conditions.
According to analysis
That institutional demand provides fundamental support during volatile periods.

Why Did XRP Crash Despite Regulatory Wins?

XRP crashed 48% from its July 2025 peak despite Ripple winning its SEC lawsuit and securing $1 billion in ETF inflows.

As reported
Three critical delays derailed momentum: the SEC lawsuit didn't conclude until August, spot ETFs launched three months late, and the CLARITY Act remains stalled in Congress.
According to reports
Ripple spent $2.7 billion acquiring firms like Hidden Road and GTreasury to access Fortune 500 payment flows, yet price gains proved elusive.
According to reports
CEO Brad Garlinghouse accused the SEC of causing $15 billion in investor losses through legal tactics.
According to reports

What Does Ripple's Strategy Mean for XRP's Future?

Ripple restructured its leadership with CTO David Schwartz transitioning to CTO Emeritus, succeeded by Dennis Jarosch.

According to analysis
The company is prioritizing zero-knowledge proofs and confidential multipurpose tokens to meet institutional privacy demands.
According to analysis
Native lending capabilities via XRPL Version 3.0.0 could shift XRP's utility beyond payments into institutional-grade DeFi next year.
According to reports
Ripple's U.S. bank charter application and partnerships with Mastercard/BNY Mellon aim to bridge blockchain with traditional finance infrastructure.
According to analysis