XRP Surges as Institutional Demand Offsets Retail Outflows

XRP (The White Whale) is experiencing a pivotal tug-of-war between retail outflows and institutional accumulation. This dynamic has created a unique market structure characterized by tightening liquidity and potential for volatility. Recent price action reflects this tension, with XRP jumping 30% to $2.36 in early January 2026. The asset's trajectory hinges on whether institutional anchors can overpower retail skepticism.

Can Institutional Demand Sustain XRP's Rally?

Spot XRP ETFs have attracted approximately $1.3 billion in assets under management within 50 days of launch. December 2025 alone saw $483 million in net inflows. That performance contrasted sharply with Bitcoin and Ethereum ETFs, which faced significant outflows during the same period. Early 2026 recorded a $40.8 million outflow from the 21Shares XRP ETF, introducing short-term uncertainty. Still, cumulative inflows of $1.18 billion by January 2026 underscore strong institutional conviction.

What's Driving the XRP Supply Squeeze?

Exchange-held XRP plummeted to 1.6 billion tokens—a seven-year low—by late 2025. This 57% decline from previous levels significantly reduced immediate sell-side pressure. Whale wallets absorbed an additional 340 million XRP between September and November 2025. Overall, roughly 5% of XRP's circulating supply, approximately 3.4 billion tokens, exited liquid markets over four months. ETF products alone are locking up an estimated 746 million XRP monthly. Thin order books amplify price moves when demand spikes.

Is XRP Poised for a Major Breakout?

Analysts project divergent price paths for XRP, ranging from $3.26 near-term to $100 long-term under optimistic scenarios. Standard Chartered predicts XRP could reach $8 in 2026 and $12.50 by 2028. That said, XRP has never traded above $3.84 historically. Regulatory clarity post-SEC settlement and growing adoption of Ripple's On-Demand Liquidity (ODL) service boost institutional confidence. Record-low exchange balances create conditions for rapid price appreciation if institutional inflows persist. The structural shift toward supply sensitivity suggests upside potential outweighs downside risks currently.

Market dynamics now favor price expansion over consolidation.