NewsBTC

Nov 29, 2025

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XRP Exchange Supply Dips as Spot ETFs Drive Institutional Demand

XRP Market Dynamics and ETF Impact

• XRP trades at approximately $2.2, with increased inflows from new Spot XRP ETFs.
• ETF fund managers must purchase XRP on the open market, unable to buy directly from Ripple or escrow accounts.
• This restriction leads to institutional buyers competing with retail investors for liquidity, affecting trading volumes and exchange reserves.
• Binance's XRP reserves have dropped to a low of 2.7 billion tokens, indicating reduced liquidity.

Supply Squeeze Considerations

• Ripple releases one billion XRP monthly but often returns 700-800 million back into escrow.
• This strategy maintains liquidity balance without significant selling pressure post-ETF approvals.
• As ETFs absorb more circulating XRP, a potential structural supply shock could occur, impacting price levels significantly.

Additionally, Ripple's developments, like Abu Dhabi recognizing RLUSD as a fiat-referenced token, aim to bolster XRP's long-term position.