What to Know:
- XRP’s future hinges on ETF demand, with potential for scarcity or price surges.
- ETF mechanisms and OTC acquisitions are currently masking the visible market impact.
- Broader bearish market conditions are muting the early demand signals for XRP ETFs.
The launch of spot ETFs has sparked debate about XRP’s potential, with some analysts outlining bullish scenarios. One commentator suggests only two realistic outcomes exist for XRP now that these ETFs are in play. These outcomes hinge on how quickly and at what price ETF issuers accumulate XRP.
According to one analysis, if XRP’s price remains stagnant, ETF issuers could absorb the entire circulating supply within a year. Alternatively, a significant price increase in XRP could slow the accumulation rate by ETFs due to higher costs. Either way, the outcome is viewed as positive for current XRP holders, suggesting a potential surge in demand.
The mechanisms behind XRP ETFs contribute to a delay in visible market impact, as noted by XRPL Foundation Board Director Fabio Marzella. He pointed out that the T+1 settlement cycle means issuers can only begin purchasing XRP the day after receiving investor funds. This delay, combined with the use of OTC desks for acquisitions, obscures the immediate buying activity.
The current market conditions also play a significant role in muting the initial demand signals for XRP. The launch of the first XRP ETF coincided with a downturn in Bitcoin’s price, impacting the broader market. Despite this, the initial XRP ETF recorded substantial inflows, indicating underlying interest.
Looking ahead, the potential launch of additional XRP ETFs from major issuers could significantly amplify demand. Projections suggest that substantial monthly inflows across multiple ETFs could drive significant market capitalization growth for XRP. This growth could potentially push the price of XRP toward significantly higher levels, assuming favorable market conditions prevail.
Source: Original article
