Ripple (XRP) Stands Alone Amid Bitcoin (BTC) Fund Outflows, What's the Secret to 8 Consecutive Weeks of Inflows?

▲ XRP, ETF/ChatGPT generated image ©

As the overall cryptocurrency market, including Bitcoin, is shaken by large-scale outflows and fears of macro tightening, only the XRP (Ripple) spot Exchange Traded Fund (ETF) has continued its net inflow streak for 8 consecutive weeks, drawing market attention. Even as over $100 million flowed out of Bitcoin (BTC) spot ETFs, XRP products listed on US stock exchanges steadily absorbed institutional funds, emerging as the last bastion of capital inflow in the cryptocurrency market.

According to the investment media TradingNews on September 10 (local time), a net outflow of $120.2 million occurred from Bitcoin spot ETFs on September 9 alone, while inflows continued into US spot XRP ETFs. As of early September, the cumulative net inflows for the seven types of XRP spot ETFs in the US reached a record high of approximately $1.682 billion, with Assets Under Management (AUM) at around $1.5 billion. It is a remarkable achievement that XRP ETFs maintained capital inflows alone, while Bitcoin funds recorded net outflows for two consecutive days and Solana (SOL) and Ethereum (ETH) products showed mixed flows. However, the net asset size of XRP ETFs is only 1.68% of the total XRP market capitalization, meaning its penetration rate is about a quarter of Bitcoin's (6.6%).

Looking at the competitive landscape by issuer, the top three asset managers dominated 92% of the total funds, showing a high concentration. Bitwise's product leads the industry with cumulative net inflows of $603.56 million and net assets of $507.46 million, boasting a competitive expense ratio of 0.34%. Canary Capital, the first to launch a product, secured second place with cumulative net inflows of $483 million to $490 million, followed by Franklin Templeton with approximately $462.86 million to $473 million. In contrast, the remaining products from 21Shares, Grayscale, and Rex-Osprey accounted for only around 8%.

Observing the speed of fund flows and price trends, a short-term deceleration phase began after peaking at the end of August. In the week ending August 28, a record weekly high of $110.49 million poured in, with double-digit net inflows for 5 consecutive trading days, and the price of XRP also surged from $1.00 to $1.70 in an instant. While $159.18 million flowed in during August, the cumulative net inflows for September sharply slowed to $14.86 million. The XRP token price has also fallen to around $1.37, representing a 49.8% decrease compared to a year ago. Experts analyzed that since the ETF's market cap share is only 1.68%, it is insufficient to offset macroeconomic selling pressure with ETF funds alone.

On-chain fundamentals and ecosystem indicators point to a robust supply reduction trend. XRP balances on exchanges plummeted by 62% in one year, from approximately 4 billion to less than 1.5 billion tokens, significantly alleviating selling pressure in the circulating market. In August, the number of active addresses on the XRP Ledger (XRPL) more than doubled month-over-month to 2.26 million, and on August 26, settlement volume surged by 52,110% to approximately 488.4 million tokens, demonstrating an institutional payment-centric usage pattern. Ripple continues its supply management by releasing 1 billion tokens (approximately $1.38 billion) from escrow on September 1, typically re-depositing 700 million to 900 million tokens.

The short-term turning point hinges on regulatory bill votes and monetary policy schedules. The US Senate is scheduled to vote on September 15 on the CLARITY Act, a US cryptocurrency market structure bill that establishes the basis for financial institutions' participation in digital asset custody and settlement, but experts estimate the probability of its passage to be low, around 10%. In contrast, the probability of the Federal Reserve (Fed) raising interest rates at the Federal Open Market Committee (FOMC) meeting starting on the same day is 62-64%, creating an asymmetric environment where macro tightening risk outweighs regulatory optimism. Experts diagnose that if weekly inflows exceed $20 million in the future, demonstrating support, the path to institutional adoption could be further strengthened. However, if the 8-week consecutive inflow record is broken amidst the impact of interest rate hikes, short-term correctional pressure will be inevitable.

*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.*