XRP Is About To Hit A Major Turning Point This Week, Analyst Says
Overview
This week is poised to be significant for XRP as it experiences its first full week of trading with five spot ETFs operating concurrently. The launch of 21Shares’ XRP fund adds to the growing list of funds, which includes Bitwise, Grayscale, Franklin Templeton, and Canary Capital. This development is crucial as it may influence XRP’s market dynamics and liquidity.
What Happened
Five spot ETFs began trading together this week, marking a notable event in the cryptocurrency market. The 21Shares XRP fund launched recently, joining four other established funds. Reports indicate that ETF inflows have exceeded $660 million within a month, with no outflows recorded over a span of ten consecutive trading days.
Bitwise has increased its XRP holdings to a significant amount, and ETF managers collectively hold assets exceeding $687 million, which corresponds to over 300 million XRP. The 21Shares fund introduced a $500,000 seed basket while imposing a management fee of 0.50%. The competition among these funds is expected to reveal their long-term purchasing strategies for XRP.
A price-path sensitivity simulation has been conducted to analyze potential demand scenarios. The simulation used a baseline demand of 74.5 million XRP per day and considered the total exchange supply of 2.7 billion XRP. The results suggested that low elasticity could lead to a rapid depletion of exchange-held supply, whereas higher elasticity could result in significant price increases as liquidity from over-the-counter (OTC) markets is absorbed.
Liquidity Pressure Builds
Concerns about liquidity have emerged, as Jake Claver, CEO of Digital Ascension Group, highlighted that private OTC and dark-pool channels may be becoming less available. An estimated 800 million XRP of private liquidity was consumed during the initial week of ETF accumulation. Since much of the ETF buying occurs off-exchange, the current price action has not fully reflected the tightening supply. This situation could lead to more volatile movements in the market as funds seek to obtain coins from public exchanges.
Whales Reshuffle Balances
Recent reports show significant activity among large XRP holders. The top 10,000 wallets now control approximately 51.39 billion XRP, accounting for around 85% of the circulating supply. In a single day, 78 new wallets acquired over 77 million XRP, with one wallet alone collecting 35 million XRP. Additionally, 44 new wallets reportedly amassed over 300 million XRP each, while existing wallets increased their balances by nearly 18 million XRP collectively. This activity indicates a trend of quiet accumulation amidst recent market fluctuations.
Analysts suggest that the current market conditions represent a test of liquidity rather than merely a demand-driven scenario. While the ETF holdings of about 300 million XRP are substantial, they remain small relative to the potential daily demand, especially if inflows persist and more funds are introduced. If OTC liquidity diminishes and ETFs are compelled to source XRP through exchanges, the market could experience heightened volatility.
Impact on the crypto market
- The concurrent trading of five spot ETFs could significantly influence XRP’s market dynamics and liquidity.
- ETF inflows exceeding $660 million without any outflows indicate strong demand for XRP.
- The potential for increased volatility arises if ETFs are forced to purchase XRP from public exchanges due to dwindling OTC liquidity.
- Large holders are actively reshuffling their balances, which may impact market sentiment and trading behavior.
- The current liquidity situation is being closely monitored by traders and portfolio managers, as it may dictate future price movements.
Updated: 12/2/2025, 3:22:16 AM
