Ripple Spot ETF sees 7 consecutive months of net inflow, but XRP plummets 16%... What's going on?

▲ XRP (XRP) ETF/ChatGPT generated image ©

Despite massive capital outflows from Bitcoin and Ethereum spot ETFs, the XRP (XRP, Ripple) spot ETF recorded a net inflow for seven consecutive months, showing a unique trend. However, the actual XRP price plummeted by 16% in October, diverging from investors' expectations.

According to the cryptocurrency media CryptoPotato on November 2 (local time), the Bitcoin (Bitcoin, BTC) spot ETF recorded a net outflow of over $500 million in October, as investor sentiment worsened after the Binance hacking incident at the end of the month. The Ethereum (Ethereum, ETH) spot ETF saw over $1.6 billion withdrawn during the same period, marking its largest monthly net outflow since its launch. In contrast, the XRP spot ETF recorded a net inflow of $4.32 million in the last week of October, maintaining its capital inflow for two consecutive weeks, following $4.25 million the previous week.

According to SoSoValue, the XRP spot ETF recovered from a small outflow in mid-October and recorded a monthly net inflow of $18.83 million. As a result, the cumulative net inflow reached a record high of $1.81 billion, continuing its streak of seven consecutive months of net inflow on a monthly basis. Over roughly one year since its launch, there has only been one instance of monthly net outflow, which was in March. By product, Bitwise's XRP ETF led with a cumulative $682 million, followed by Franklin's XRPZ with $524 million, and Canary Capital's XRPC with $485 million.

This performance comes as Ripple announced several business achievements in October, including major regulatory approvals and new partnerships. However, the scale of capital inflow into the XRP spot ETF itself did not meet expectations. The net inflow of $18.83 million in October was slightly higher than the $15.59 million recorded in January, making it the second-worst monthly performance since its launch. Despite the record of seven consecutive months of net inflow, the actual new capital inflow was limited.

The bigger problem is that the ETF capital inflow and Ripple's business achievements did not lead to an increase in XRP's price. XRP failed to break above $1.50 in early October and then turned bearish, plummeting below $1.20 after the Binance hacking incident last Friday. Although it rebounded slightly to around $1.25 afterward, its monthly return for October was a negative 16%. This is the worst monthly performance since June, and the three consecutive months of upward trend from July to September also ended.

CryptoPotato pointed out that despite the XRP spot ETF maintaining relatively robust capital flows among major cryptocurrency spot ETFs, two problems remain. The monthly net inflow was the second lowest ever, and despite continuous capital inflows, the price of the underlying asset, XRP, fell significantly. While the cumulative net inflow of the XRP spot ETF set a new record high, the XRP price fell by 16% in October, showing a clear discrepancy with the ETF's performance.

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