Why are people buying Ripple (XRP) Spot ETFs, but the price isn't rising? The key variable is the 'CLARITY Act'

XRP Spot ETF sees 70% price drop despite 8 consecutive weeks of inflows… 'CLARITY Act' is the key to reversal

▲ XRP ETF/ChatGPT generated image ©

Despite US XRP (Ripple) spot ETFs recording 8 consecutive weeks of inflows, nearing a cumulative net inflow of $1.47 billion, the XRP price remains approximately 70% lower than its all-time high. The market believes that consistent ETF buying is supporting the downside, but the passage of the US cryptocurrency market structure bill, the CLARITY Act, will be a decisive variable for a full price reversal.

According to cryptocurrency market tracking site CoinMarketCap on July 3 (local time), US XRP spot ETFs have approached a cumulative net inflow of $1.47 billion since their launch in November last year and continued net inflows for 8 consecutive weeks. Especially in May this year, the largest monthly funds flowed in since 2026, without a single day of net outflow. The XRP currently held in ETFs amounts to 905 million units. However, the XRP price is approximately $1.12, a roughly 70% drop from its peak of $3.65.

The market analyzed that ETF inflows are merely supporting the downside rather than acting as a catalyst for price increases. XRP included in ETFs is excluded from market circulation, reducing selling pressure. However, this effect is offset by Ripple's monthly escrow release of up to 1 billion XRP, long-term holders realizing profits, and existing investors selling their holdings. Ultimately, while ETFs are absorbing supply, the current scale is deemed insufficient to absorb all the constant supply entering the market.

The growth of the ETF market continues. Currently, seven XRP spot ETFs are operating in the US, including XRPI, REX-Osprey's XRPR, Bitwise, Canary Capital, Franklin Templeton, Grayscale, and 21Shares. The total assets under management for these ETFs range from approximately $1.2 billion to $1.4 billion, and the XRP held has significantly increased from about 478 million units at the beginning of this year to 905 million units. However, in terms of trading liquidity, Nasdaq-listed XRPI recorded approximately nine times higher trading volume than XRPR, making it a primary investment tool for institutional investors.

The market's attention is turning to the CLARITY Act. If the bill passes the Senate and XRP secures legal status as a digital commodity, experts project the potential for $4 billion to $10 billion in new ETF funds to flow in. Conversely, if the bill's processing is delayed, it is highly likely that the price will continue its sideways movement, as the current moderate fund inflows would be insufficient to absorb escrowed and pending sell-off volumes.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*