If spot XRP ETFs arrive, who will buy and how much will liquidity shift?

Six spot XRP exchange-traded funds (ETFs) await SEC approval in the US, with final deadlines for October, and they can reshape market conditions following their debut.

The regulatory backdrop underwent a significant change on Sept. 17, when the SEC approved generic listing standards for crypto-related ETFs across major exchanges.

As a result, Bloomberg senior ETF analyst Eric Balchunas noted on Sept. 29 that approvals on altcoin ETFs are not a matter of “if,” but “when.”

However, timing still depends on Washington. During the federal shutdown, the SEC is operating with a skeleton crew and does not process registration statements, pausing the launches of ETFs until funding resumes.

Once staff return, effectiveness orders can be reassessed, meaning an October approval is still plausible.

The regulatory backdrop suggests that Bitwise, 21Shares, WisdomTree, Canary Capital, CoinShares, and Grayscale will launch their XRP products on Cboe this month. Consequently, the move will restructure the XRP market.

How much money flows?

How much money could flow is a live debate, but several guideposts exist. Market researchers suggested as much as $8 billion in first-year inflows, with CryptoQuant’s Julio Moreno estimating ETFs could absorb 1% to 4% of circulating supply.

Meanwhile, Bitget’s Jamie Elkaleh estimated the $4 billion to $8 billion range as a realistic base case.

JPMorgan’s January framework, extrapolated from Bitcoin and Ethereum penetration, projected 3% to 6% of market cap converted into inflows.

XRP traded at $3.05 as of press time, which implies roughly $5.5 billion to $11 billion in year-one net creations.

In the battle to capture capital flows in this billion-dollar market, fee competition and distribution strategies are crucial. Lower expense ratios and broad brokerage access historically correlate with stronger early flows.

Regarding investor positioning, retail investors are likely to dominate the first-year inflows if XRP is to replicate the movements of spot Bitcoin ETFs. A K33 February research highlighted that 25.4% of spot Bitcoin ETF assets under management are held by institutions.

Sell the news and supply trends

Launch day price action demands nuance. Bitcoin’s US spot ETFs triggered a “sell the news” stretch, as BTC tumbled 7.5% on the day following the products’ launch and risked losing the $40,000 threshold.

Ethereum’s spot ETF debut saw a similar movement, with a 4.25% decline the day after its launch. In a larger timeframe, Bitcoin quickly climbed to a local top of nearly $74,000 two months later, while Ethereum continued to nosedive until early October.

However, Bitcoin’s movement occurred in a bullish environment for the entire market, while the Ethereum ETF aftermath took place during a significant correction period. As a result, it is challenging to predict XRP’s price action, although a sell-the-news event is likely to happen, considering past events.

What is almost certain to change is XRP’s market plumbing. Glassnode documented how US spot ETFs have become a structural “supply absorber” for Bitcoin and Ethereum on their weekly reports.

The exchange-traded products capture net creations that remove coins from the liquid float. When ETF demand cools, fragility rises. Conversely, when flows resume, drawdowns stabilize as supply tightens.

An XRP complex would likely replicate that cadence, with steady creations capturing inventory inside funds, shifting price discovery toward the pace of advisor and retail allocations, and reducing sensitivity to purely crypto-native liquidity cycles.

With the crypto ETF rule change in place and the paperwork live, the core question for XRP ETFs is not about a potential approval, but how the first wave of flows reshapes XRP’s market dynamics.

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