The cryptocurrency world often celebrates impressive milestones. XRP’s spot exchange-traded funds (ETFs) recently crossed $1 billion in assets under management (AUM), with about $1.14 billion spread across five issuers and net inflows near $423.27 million since mid-November. Yet, XRP itself hovers around $1.88. This appears paradoxical for those accustomed to Bitcoin’s ETF era, where wrapper demand seemed directly tied to price hikes. However, ETFs do not magically lift prices. They channel demand through specific mechanisms, and unless these pull real supply from the market faster than it returns, an impressive AUM can coexist with a stagnant underlying asset. The key to this disconnect lies in distinguishing between headline AUM and the persistent flow of net creations.
AUM is a Billboard, Net Creations Do the Work
Readers often equate "AUM" with "new buying," a critical misunderstanding. The most impactful lever for price is not total AUM, but the consistent pace of net creations. When fresh capital enters an ETF, authorized participants (APs) must source underlying XRP, issue new shares, and hold that XRP securely. This process directly removes XRP from the tradable market. Understanding this distinction clarifies why XRP's price appears stagnant.
With total AUM around $1.14 billion and net inflows of $423.27 million since mid-November, a substantial portion of that AUM stems from sources other than recent cash. This includes market maker positioning, seeded inventory, and asset appreciation. These are legitimate, but don't represent incremental buying pressure that tightens tradable supply.
At roughly $1.88 per XRP, $1.14 billion in AUM translates to about 600 million XRP held within these ETFs. Against a circulating supply near 60.67 billion XRP, this means about 1% of the total circulating supply is in wrappers. This 1% is significant: it warehouses assets and broadens access. Yet, it isn't the kind of share-of-float that, on its own, forces a one-way price squeeze.
XRP vs. Bitcoin: A Tale of Two Wrapper Footprints
Bitcoin offers a crucial benchmark. Its spot ETF era trained readers to expect immediate, visible repricing. By late 2025, US spot Bitcoin ETFs held about 1,298,757 BTC, roughly 6.185% of Bitcoin’s 21 million total supply. This ratio largely explains why Bitcoin’s wrapper story felt linear: significant float pulled into non-day-trading structures forced remaining liquid supply to clear at higher prices.
XRP’s wrapper footprint, at around 1% of circulating supply, is considerably smaller. Consequently, the mechanical "warehouse effect" is less pronounced. The pace of inflows, averaging $12 million daily ($423.27 million over 35 days), is a steady bid. However, for a token with hundreds of millions in daily spot turnover, it's not automatically the dominant force in price discovery.
Debut-day figures, too, can mislead. Canary’s spot XRP ETF reportedly drew over $46 million in first-day trading. Such figures indicate real attention and tradability. However, they don't differentiate new share creations, secondary churn, or market makers recycling inventory. The first key ETF lesson is clear: AUM is a snapshot, while net creations are the flow that does the heavy lifting on price.
Beyond ETFs: Other Dynamics Muting XRP's Price Action
Even acknowledging XRP’s genuine ETF story, other market forces simultaneously absorb this demand without an immediate price reaction.
- Predictable Supply and Legal Hurdles: Ripple locked 55 billion XRP into on-ledger escrows, releasing up to 1 billion XRP monthly. This known cadence influences how liquidity providers quote risk. Furthermore, while 2025 brought legal clarity with the SEC ending its lawsuit against Ripple, the associated fine and injunction regarding institutional sales left a record. This subtly influences institutional perceptions and access.
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Sophisticated Hedging Strategies: Most retail traders rarely see the impact of hedging. ETF creations are not pure, unhedged spot buying. Authorized participants and market makers hedge their exposure, often buying spot XRP while simultaneously shorting futures or perpetuals to remain neutral or lock in spreads. When this hedge layer is deep, a portion of what feels like demand is met with synthetic selling, preventing the spot chart from reacting.
The institutional hedging toolkit for XRP expanded in 2025, with CME announcing plans for cash-settled XRP futures. This provides a crucial bridge for firms to use existing risk management frameworks. On CoinGlass, XRP derivatives activity is substantial, with open interest around $3.40 billion and 24-hour futures volume near $2.56 billion. This robust market allows for ETF-related hedges to lean against spot demand.
- Fragmented Liquidity: Liquidity is not just "how much volume prints," but "where buyers and sellers meet." Kaiko reported in April 2025 that XRP’s spot volume was heavily concentrated offshore. While offshore concentration offers raw liquidity, it diffuses price discovery across fragmented pools, each with unique participant mix and hedging behaviors. This makes it easier for flows to be absorbed without uniform spot price reaction.
The Broader Market Context
XRP’s recent price history also plays a role. It closed near $1.88 on January 1, 2026, having printed a closing high around $3.55 in July 2025 and a low around $1.80 in April 2025. This roughly 47% drawdown from its July peak means buyers take profits faster and sellers show up sooner. Recent spot volume has been below the 2025 daily average, and high realized volatility over the last 90 days contributes to erratic price behavior.
Conclusion: The Pipes Are Moving Water, Not Forcing a Flood
Putting this all together, XRP’s relatively flat price is not a contradiction. A $1.14 billion wrapper representing about 1% of circulating supply can coexist with a choppy chart when net creations are steady but not dominant. This is especially true with a known escrow cadence anchoring supply expectations, robust hedges in perps and futures meeting spot buying, and liquidity diffused across venues.
For the link between XRP ETF growth and spot price to tighten, as it did for Bitcoin, specific conditions are needed. Net creations must accelerate enough to outpace routine sell flow. Some of the hedge layer would need to unwind, and a deeper, cleaner onshore liquidity base would be essential. In short, the wrappers must become a relentless vacuum for supply, not just a new access point.
Until then, the $1 billion XRP ETF milestone is significant for other reasons. It shows the wrapper category has moved from novelty to habit. Advisors and brokerage accounts now have a simple way to hold XRP without managing wallets. When market sentiment turns friendlier and flows pick up, the infrastructure for a bigger move is already there. The pipes exist. Right now, they are moving water, not forcing a flood.
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