XRP ETFs Draw $1.4B Despite 30% Price Plunge
Ripple-linked exchange-traded funds (ETFs) have accumulated $1.4 billion in inflows in the four months since their debut, demonstrating sustained demand for the products even as the underlying asset struggles. This inflow occurred while the price of XRP concurrently declined by 30%. The token's weakness is part of a broader trend, with its value having fallen 54% since October and over 60% from its all-time high, creating a stark disconnect between demand for the regulated investment vehicle and the spot market's performance.
Despite the price weakness, network activity has shown some signs of life, with the XRP Ledger processing over 1.5 billion XRP in transfers during February. However, the asset's price remains technically constrained, finding resistance near the $1.3880 level. The divergence between strong ETF inflows and negative price action points to significant selling pressure overwhelming the new demand.
Retail 'Super Fans' Drive Demand as Institutions Watch
The investor base for XRP ETFs appears distinctly different from that of other major crypto assets. According to data from Bloomberg Intelligence, only 16% of XRP ETF holdings are connected to institutional filings. This suggests that the bulk of the $1.4 billion in assets comes from a dedicated retail base, often referred to as the "XRP Army." In contrast, Solana ETFs show a much stronger institutional footprint, with 49% of assets linked to professional investors like investment advisers and hedge funds.
This composition explains the asset's price behavior, as the demand is concentrated within a specific loyalist cohort rather than reflecting broad-based institutional adoption. Bloomberg Intelligence ETF analyst Eric Balchunas noted this trend on March 10, stating his assessment of the inflows.
My guess is this [degree of inflows] is largely XRP superfans versus casual retail.
— Eric Balchunas, ETF Analyst, Bloomberg Intelligence.
Ripple's Corporate Valuation Hits $50B on Share Buyback
Adding another layer to the market divergence, Ripple has seen its corporate valuation climb to $50 billion following the initiation of a share buyback program. The company is repurchasing $750 million worth of shares from investors and employees through April. This move comes after a January 2024 buyback of $285 million in shares at an $11 billion valuation, highlighting significant growth in the company's perceived value. The new valuation also reflects a 25% increase since Ripple raised $500 million in November from major investors including Fortress Investment Group and Citadel Securities. This corporate financial strength stands in sharp contrast to the persistent weakness of the XRP token in public markets.
