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▲ XRP (XRP, ETF/ChatGPT Generated Image ©
Despite massive inflows totaling $1.66 billion into the US XRP (Ripple) spot ETF market, recording an all-time high trading volume, it has been revealed that most investors are experiencing severe unrealized losses due to Ripple's escrow volume of 300 million units released every month and price drops.
According to TradingNews, an investment media outlet, on September 1st (local time), the US XRP spot ETF recorded a weekly net inflow of $110.49 million and an all-time high weekly trading volume of $363.03 million for the week ending August 28th. This brought the cumulative net inflow to $1.66 billion and the assets under custody to 1.1 billion XRP (net assets $1.44 billion), continuing a 10-consecutive-trading-day net inflow streak. While the Bitcoin (BTC) spot ETF recorded a net outflow of $201.9 million and Ethereum (ETH) continued its rally, XRP also rebounded by 28.5% in August, trading around $1.38.
However, despite the impressive appearance of fund inflows, the returns across the seven spot products are abysmal. Investors who entered since the launch in November 2025 have recorded losses of 40% to 50%, and those who bought near the peak in January 2026 have recorded losses of up to 58%. The Bitwise fund has dropped 41.7% year-to-date, and XRPR from REX-Osprey, the first US spot product, has plummeted 65.81% since its listing. Furthermore, Grayscale's trust sold over 103 million XRP, worth $180.78 million, in the first half alone, exerting strong downward pressure.
The fundamental reason for this sluggishness lies in Ripple's continuous supply expansion. Ripple releases 1 billion XRP from escrow on the 1st of every month, re-depositing a portion, and circulates approximately 300 million XRP (currently worth about $414 million) into the market each month. The 1.1 billion XRP absorbed by ETFs over the past 10 months accounts for only 37% of the 3 billion XRP supplied through escrow during the same period, and merely 1.8% of the total circulating supply, which was insufficient to offset the selling pressure.
Meanwhile, the fee competition among asset managers has become unprecedentedly fierce. While Franklin Templeton's XRPZ set the lowest fee among US cryptocurrency spot ETFs at 0.19%, REX-Osprey charged 0.75%, and Volatility Shares' futures-based product XRPI incurred 1.46% plus rollover costs, creating a maximum gap of 127 basis points (1.27 percentage points) between products. As a result, an extreme concentration phenomenon occurred, with three firms—Bitwise ($542 million), Canary Capital ($468 million), and Franklin Templeton ($434 million)—monopolizing 92% of the total inbound funds.
Market experts have pointed to the Senate cloture vote on the US cryptocurrency market structure bill, the CLARITY Act, scheduled for September 15th, as the biggest watershed that will determine its future. Analysis suggests that if the bill passes, institutional fund inflows could expand to $667 million per month, surpassing the escrow supply for the first time. However, a cautious approach is required as the macro environment is unfavorable for non-yield assets, with the CME FedWatch reflecting a 66.4% probability of an interest rate hike by the Federal Open Market Committee (FOMC) on September 16th, and the US 10-year Treasury yield soaring to 4.786%.
*Disclaimer: This article is for investment reference 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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