With the launch of the first XRP spot ETFs, investors wonder if XRP can mirror Bitcoin's post-ETF surge. Bitcoin ETFs with over $65 billion in net inflows have driven the crypto king to unparalleled heights. Will XRP follow suit?
The launch of Bitcoin ETFs in January 2024 was a game changer. By injecting over $65 billion into the market, they not only validated Bitcoin as an institutional asset class but also created a powerful multiplier effect. Analysts estimate that each dollar invested through an ETF had an impact of nearly 100 times on Bitcoin’s market capitalization. It was this mechanism that enabled BTC to surge from $45,000 to over $100,000 in less than a year. ETF is going to drive XRP to success ?
XRP now finds itself at a similar crossroads. The first spot ETF, the Canary Capital XRP ETF (XRPC), has already recorded $245 million in inflows on its first day, and nine other ETFs, including giants like Franklin Templeton and Bitwise, are set to launch. This wave could quickly inject over $1.2 billion. But what would happen if XRP managed to sustainably attract institutional investors?
Based on the multiplier effect observed with Bitcoin, several scenarios have been projected by artificial intelligence Grok for XRP’s price. These projections depend on the share of institutional flows that XRP ETFs will manage to capture compared to Bitcoin ETFs.
If XRP ETFs capture 15% of Bitcoin ETFs’ annual flows, this would represent approximately $5.85 billion in inflows. Applying a 100x multiplier effect, XRP’s market capitalization could increase by $585 billion. With a circulating supply of 58 billion tokens, this would translate to a price around $12 to $13 by the end of 2025.
In a more optimistic scenario where XRP ETFs would capture 50% of the flows from Bitcoin ETFs in 2025 (approximately $13 billion over two years), and with a slightly more conservative multiplier of 90x, XRP’s price could climb to $18 to $22. This scenario assumes strong institutional adoption, encouraged by the regulatory clarity XRP enjoys following its lawsuit against the SEC.
An even more bullish scenario would see XRP ETFs not only attract significant flows ($7.2 billion in one year) but also create a scarcity effect by removing a significant portion of the circulating supply. If ETFs manage to capture 5% of XRP’s supply, as was the case for Solana, the supply shock could propel the price toward the $20 to $25 range.
These projections, while enticing, depend on several factors. XRP’s adoption by banks for cross-border payments (via Ripple’s ODL solution which already processes $2.7 trillion annually) and its role in real world asset tokenization (a market estimated at $10.9 trillion by 2030) will be essential catalysts. XRP’s regulatory clarity in the United States is a considerable advantage compared to other altcoins.
However, risks remain. A restrictive monetary policy from the Federal Reserve, increased competition from stablecoins and CBDCs, or a “sell the news” phenomenon after ETF launches could slow the rally. If incoming flows disappoint, the price could be limited to a range of $4 to $6.
In conclusion, if XRP manages to follow in Bitcoin’s footsteps, the arrival of ETFs could mark the beginning of a new era for this asset. The coming months will be decisive in seeing whether institutional appetite will meet expectations.
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Gaston has been a writer for over 7 years and a passionate cryptocurrency enthusiast since 2020. He loves exploring the crypto ecosystem and is now dedicated to sharing his insights and discoveries through InvestX.
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