XRP Price and ETF Flows: Why Supply Squeeze Has Not Happened

XRP is trading at $1.01, down 6.3% over the past week, as the expected price squeeze from exchange-traded fund (ETF) accumulation fails to materialize [1]. While investors have locked 930 million tokens into five XRP ETFs since November 2025, the impact on market price remains muted due to consistent monthly supply injections from Ripple’s escrow and a significant slowdown in new capital inflows [1].

The mechanics of the supply imbalance

The primary challenge for XRP price appreciation is the ratio of ETF accumulation to Ripple’s ongoing token releases. Since November 2025, XRP ETFs have pulled 930 million tokens off the market, representing only 1.49% of the 62.5 billion XRP currently in circulation [1]. This accumulation is consistently offset by Ripple’s monthly escrow schedule, which releases 1 billion tokens every month [1]. While Ripple re-locks approximately 700 million of those tokens, the remaining 300 million enter circulation to support operations and liquidity [1].

Because the ETFs have averaged only 43 million tokens in monthly accumulation throughout 2026, the rate of new supply entering the market significantly outpaces the rate at which these funds remove it [1]. Furthermore, the buying momentum has stalled; after attracting $666.61 million in November 2025 and $499.91 million in December 2025, inflows dropped to just $1.01 million in the most recent month [1].

Institutional positioning and market sentiment

Market sentiment for XRP is currently at low levels, with the price trading 70% below its high from last year [2]. While some analysts suggest that XRP could reach double-digit price targets or higher, these projections often face mathematical hurdles given the 62 billion circulating supply [2]. For instance, reaching a $4 price point would imply a market capitalization of $250 billion, exceeding that of Ethereum [2].

Ripple continues to build its financial infrastructure, spending $3 billion on blockchain-related transactions and acquiring firms like the prime broker Hidden Road to expand its institutional reach [2, 3]. Proponents argue that if XRP is adopted as collateral by financial institutions—similar to how gold is held—the demand for "idle inventory" could shift the price dynamics, though this remains a theoretical scenario [3].

What to watch

• CLARITY Act: Monitor for legislative developments, as analysts suggest this bill could settle XRP’s legal status and potentially trigger up to $8 billion in annual ETF inflows [1].
• Escrow Activity: Track the monthly 300 million token net release, which continues to provide a consistent supply of liquidity that funds must absorb to create upward price pressure [1].
• Institutional Adoption: Observe whether Ripple’s expansion into real-world asset (RWA) tokenization and prime brokerage services leads to increased institutional holding of XRP as collateral [2, 3].

Whether XRP can break its current $1 to $4 trading range depends on whether future institutional demand can consistently outpace the monthly supply releases from Ripple’s escrow [1, 2]. Until inflows accelerate to exceed the 300 million monthly token injection, the supply-demand balance remains tilted toward existing market liquidity [1].