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While Solana (SOL) showed dominance in price trends in the market, institutional funds from Wall Street rapidly converged on XRP spot ETFs. Even amidst price stagnation, institutional investors more actively chose XRP spot ETFs over Solana, widening the gap in capital inflow between the two assets.
According to cryptocurrency media outlet 24/7 Wall Street on May 20 (local time), the XRP spot ETF, launched last November, has recorded cumulative net inflows of $1.39 billion to date. In contrast, the Solana spot ETF, which entered the market a month earlier in October, had cumulative inflows of only $1.12 billion. The XRP spot ETF, a latecomer, surpassed the Solana spot ETF by $270 million. Considering that Solana outperformed XRP in price trends this year, and XRP has fallen 39% from its peak in July last year, institutional capital flows moved in a different direction than market price trends.
The gap widened due to the consistency of capital inflows. The XRP spot ETF recorded 13 consecutive trading days of net inflows in early December last year, quickly surpassing Solana's cumulative inflows. In April, it continued to see inflows for 14 consecutive trading days, adding $81.6 million monthly. In contrast, the Solana spot ETF's monthly inflow, which was $419 million in November last year, plummeted to $38.69 million in April. In May, over 19 trading days, the Solana spot ETF saw inflows of $99 million, slightly ahead of the XRP spot ETF's $95 million, but this was limited in narrowing the previously accumulated gap.
In terms of fund structure, the XRP spot ETF also showed a more stable flow. For the Solana spot ETF, $36 million, representing 92% of the total funds, was concentrated in a single product, Bitwise's BSOL. As funds are concentrated in a specific product, the volatility of the entire product group could increase if fee competitiveness or investor sentiment weakens. In contrast, funds for the XRP spot ETF were diversified across five funds, including Canary Capital's XRPC, Grayscale's GXRP, Franklin Templeton's XRPZ, Bitwise's XRP, and 21Shares' TOXR. This low reliance on a single product created a relatively stable capital flow.
Regulatory variables are also cited as a key factor determining the direction of institutional funds. The U.S. cryptocurrency market structure bill, which is awaiting a full Senate vote in June, is considered a matter that could provide legal standards related to custody and financial statement exposure that pension funds and regulated asset managers must verify before deploying large-scale funds. Indeed, JPMorgan disclosed in its Q1 13F report that it had fully liquidated its XRP spot ETF position, which was its largest holding at $154 million as of Q4 last year, and its Solana spot ETF holdings. This indicates that institutions are managing their funds tactically and cautiously before regulatory frameworks are established. While Solana is pursuing the Alpenglow network upgrade aimed at ultra-fast transaction finality, institutional funds have shown a greater sensitivity to regulatory clarity than to technological advancements.
JPMorgan believes that if the U.S. cryptocurrency market structure bill is finally passed, an additional $4 billion to $8 billion in funds could flow into the XRP ecosystem. Currently, amidst macroeconomic pressures and geopolitical risks, ETF capital inflows are primarily serving to absorb selling pressure rather than directly leading to price surges, but if institutional regulatory environments are established, competition for institutional funds surrounding XRP spot ETFs is expected to intensify further.
*Disclaimer: This article is for investment reference purposes only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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