XRP Price Forecast: Key Factors That Could Propel It To $3 In Early 2026

Overview

At the beginning of the week, XRP’s price saw a decline of 4%, positioning it nearly 50% below its all-time highs. Despite this setback, analysts project that significant gains may be on the horizon for XRP, particularly in January 2026, due to several key factors that could transform its market dynamics.

Recent Developments

Analysts highlight the approval of XRP exchange-traded funds (ETFs) by Vanguard as a pivotal moment for the cryptocurrency. According to market expert Sam Daodu from 24/7 Wall St., the approval facilitates broader access to XRP, allowing Vanguard’s advisors to allocate XRP exposure through regulated ETFs without cumbersome processes. This move is significant because it introduces three interconnected factors: an influx of institutional capital through ETF investments, a reduction in XRP supply, and Vanguard’s influential role in reshaping the asset’s market perception.

The launch of the XRP ETF has already yielded remarkable results. Within the first four weeks of trading, XRP inflows reached $1 billion, making it one of the fastest-growing crypto ETF launches to date. Additionally, the market supply of XRP has contracted sharply, dropping from approximately 3.9 billion tokens at the beginning of 2025 to about 1.6 billion by December. This reduction is primarily due to large holders choosing not to distribute their tokens, resulting in accumulation in whale wallets and the withdrawal of tokens from liquid markets for ETF custody.

The decrease in supply means that smaller inflows now have a more substantial impact on the market. With only 1.6 billion tokens available on exchanges, daily ETF purchases of $20-30 million can significantly affect market dynamics.

Implications of ETF Launch

The Vanguard XRP ETF launch is crucial as it places tokens into regulated custody vehicles, which tend to discourage frequent selling. Unlike tokens held on exchanges that can be easily traded, ETF custody encourages a buy-and-hold strategy. This shift fosters conditions for gradual price appreciation driven by sustained institutional demand amid a dwindling available supply.

Given that the decision to provide ETF access came late in the year, year-end trading has generally focused on maintaining existing allocations rather than creating new positions. While the ETF adds credibility to XRP, it does not create immediate price pressure. The path to a $3 valuation by January will depend on how quickly advisory capital is mobilized, the persistence of supply compression, and the overall stability of the markets.

From author

The current market conditions for XRP present a unique opportunity for institutional investors, particularly with the launch of the Vanguard ETF. The dynamics of supply and demand are crucial to understanding the potential for price appreciation. As XRP continues to evolve within the regulatory framework, its future will largely depend on how market participants respond to these developments.

Impact on the crypto market

• The approval of XRP ETFs by Vanguard could lead to increased institutional interest in XRP, potentially driving up demand.
• The significant contraction in XRP supply may enhance the impact of new investments, amplifying price movements.
• The successful launch of the XRP ETF could set a precedent for other cryptocurrencies, influencing market sentiment towards altcoins.
• The buy-and-hold strategy encouraged by ETF custody may lead to more stable price appreciation over time.
• The overall market’s response to XRP’s institutional adoption may affect regulatory perceptions of cryptocurrencies in general.