Institutional Investors Drive Unprecedented XRP ETF Inflows

While the spot price of XRP appears stagnant, a significant accumulation is occurring behind the scenes. Institutional capital is flooding into new U.S. spot ETFs for the asset, with assets under management approaching the billion-dollar mark at a pace that eclipses the early trajectory of Ethereum funds. This divergence between price action and investment product inflows raises a compelling question about institutional strategy.

The contrast between market performance and fund flows is striking. XRP exchange-traded funds have recorded net inflows for 16 consecutive days as of this Tuesday. In the last week alone, more than $170 million entered these products, with no significant outflows reported.

This trend becomes more notable when compared to market leaders. While Bitcoin ETFs recently faced outflows of $60 million, XRP products continued to attract capital. The ETF from Canary Capital is leading this charge, followed by offerings from established firms like Grayscale and Franklin Templeton. This sustained activity suggests professional investors are using the current price level for strategic positioning.

Consolidation and On-Chain Signals

Despite this institutional buying frenzy, the XRP token is currently trading at $2.05, approximately 32% below its 52-week high. The $2.04 technical level is acting as critical support. A break below could trigger further selling, while resistance sits at $2.29 on the upside.

Should investors sell immediately? Or is it worth buying XRP?

However, underlying blockchain data provides arguments for a potential trend shift. The metric known as "Supply in Profit" on the XRP Ledger has fallen to a 13-month low. This indicates fewer coins are held at a profit, a condition that has historically signaled that selling pressure from profit-taking is largely exhausted. Concurrently, network activity surged, with over 700 million transactions processed within 24 hours, driven by new ETF liquidity.

Corporate Developments Bolster Confidence

Supportive corporate news is also strengthening market confidence. Ripple Labs concluded a $500 million funding round in November, elevating the company's valuation to a record $40 billion. Investors such as Citadel Securities secured stakes in this round. Furthermore, Ripple's native stablecoin, RLUSD, has surpassed a $1 billion market capitalization, further driving adoption within its ecosystem.

The current market phase resembles a coiled spring. While the price consolidates, fundamental developments are creating a new reality. The planned activation of the technical "fixDirectoryLimit" update on December 18th promises further ledger optimization. If the $2.04 support holds, the combination of robust institutional demand and a dwindling supply of coins for sale could pave the way for a recovery.