XRP ETFs lock 930M tokens as escrow offsets supply squeeze

Nearly a billion XRP tokens sit locked in exchange-traded funds, yet the price has gone nowhere.

XRP ETFs hold 930 million tokens in custody, yet XRP trades at $1.01, down 6.3 percent this week and 8.2 percent this month. The five US spot funds have pulled in $1.51 billion since launching in November 2025, according to SoSoValue data, but the token's price has fallen about a third from where it traded when the first fund went live.

The disconnect comes down to scale and supply. The ETF holdings represent just 1.49 percent of the 62.5 billion XRP in circulation, leaving 61.5 billion tokens in the hands of other holders. For comparison, spot Bitcoin ETFs own 6.10 percent of Bitcoin's supply — roughly four times the share XRP funds hold of their token. Matching that ratio would require the XRP ETFs to accumulate nearly 3.8 billion tokens, or about three billion more than they currently hold.

Ripple's monthly escrow releases compound the problem. On the first day of every month since December 2017, the company unlocks 1 billion XRP from escrow. Ripple re-locks roughly 700 million tokens into fresh escrow contracts, leaving about 300 million entering circulation each month to cover operations, liquidity and partnerships. Across the nine months since the XRP ETFs launched, escrow has added an estimated two to three billion XRP against the 930 million the funds took out.

The tokens do not hit exchanges directly, which is why the monthly unlock rarely moves the price on the day it happens. They flow to Ripple's operational wallets and get sold mostly in private deals with large buyers, so the weight arrives gradually rather than as one visible dump. Ripple still holds more than 32 billion XRP in escrow.

ETF inflows have collapsed since launch

The buying that drove early inflows has also dried up. Investors put $666.61 million into XRP ETFs in November and $499.91 million in December — 77 percent of every dollar those funds have ever gathered. Since then, inflows have slowed to a trickle: $27.29 million across all of July and just $1.01 million this month, including three sessions with zero net flows on August 4, 7 and 10.

Coins held on exchanges — the supply most ready to be sold — have been shrinking too. Binance, the largest trading venue for XRP, holds about 2.6 billion tokens, roughly 200 million below its March peak and the lowest level since February, according to CryptoQuant. Monthly deposits have fallen to about 3.6 million tokens, the lowest in CryptoQuant's records.

Tokens in an ETF can also flow back out. Grayscale's XRP trust held 122.23 million tokens at the end of 2025 but only 55.04 million by June 30, after selling 103.41 million to pay investors who cashed out while creating just 36.27 million new ones over the same period.

What would actually squeeze the price

A squeeze requires buyers taking coins faster than Ripple releases them. Ripple puts about 300 million XRP into circulation every month, which at today's price costs roughly $300 million to absorb. The XRP ETFs have averaged $43 million a month in inflows across 2026 — far short of that threshold.

The CLARITY Act is the trigger that could change the math. JPMorgan and Standard Chartered have both estimated XRP ETFs could take in up to $8 billion in a year if the bill becomes law, since it would permanently settle XRP's legal status. That works out to roughly $667 million a month, more than double what Ripple releases, and at that pace the funds would remove coins from circulation faster than escrow puts them back.

Until then, the ETF lockup remains a rounding error against XRP's total supply. The funds hold less than 1.5 percent of circulating tokens, and Ripple's monthly releases keep replenishing what the ETFs remove. For the squeeze thesis to play out, either inflows need to accelerate dramatically or Ripple's escrow releases need to slow — neither of which appears imminent.

This article is for informational purposes only and does not constitute investment advice.