Spot XRP (CRYPTO: XRP) ETFs have attracted more than $1.4 billion in cumulative inflows since launching in late 2025, yet XRP plunged 52% over the past year.

Investors are now wondering why institutional adoption hasn’t translated into higher prices.

Why ETFs Have Not Moved The Price

In an X post on June 1, crypto.news noted that XRP became one of the fastest-growing single-asset crypto ETF categories in history, trailing only Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Despite the strong launch, ETF holdings still represent only about 1.3% of XRP’s circulating supply. For an asset with a market capitalization measured in billions of dollars, that level of ownership is meaningful but not large enough to create a major supply shock.

ETF flows also influence prices indirectly rather than mechanically.

When new shares are created, XRP is purchased and transferred into custody, reducing liquid supply. However, the impact is gradual and typically becomes more visible during broader bull markets when demand is already increasing.

Meanwhile, XRP continues to face offsetting sources of supply.

Ripple’s escrow releases, profit-taking from long-term holders and broader market weakness have absorbed much of the ETF demand.

As a result, ETF buying has functioned more as a supportive tailwind than a dominant price driver.

What Could Change The Equation?

Analysts point to several catalysts that could make ETF demand more impactful. A significant acceleration in inflows would be the most direct driver.

Monthly flows would likely need to return closer to launch-period levels to create a meaningful supply squeeze. More than 80% of total inflows arrived during the first two months after launch.

Thereafter, there is an approximate 97% decline in monthly inflows between December and January as early investors took profits and broader market conditions weakened.                          

Also, regulatory developments such as passage of the CLARITY Act could also encourage larger institutional allocations.

A broader crypto bull market led by Bitcoin, reduced sell-side pressure from escrow releases and profit-taking, or a major allocation from a pension fund, sovereign wealth fund or corporate treasury could further amplify the effect of ETF demand.

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