As the crypto market continues to evolve, some analysts are suggesting that an imminent supply shock could be on the horizon for XRP. This speculation comes after the recent launch of two ’33 Act XRP exchange-traded funds (ETFs), including a notable fund from Bitwise, with even more ETFs expected to follow suit in the coming weeks.
Factors Indicating a Supply Shock
Crypto analyst Cobb has expressed excitement about the potential supply shock for XRP, claiming that the market has not yet priced in the significant impact these new XRP ETFs could have, a phenomenon previously observed in the cases of Bitcoin and Ethereum. Just last year, Bitcoin witnessed a surge to new all-time highs following the launch of its own ETFs, while Ethereum saw a notable increase in price and inflows with the introduction of its ETFs this year.
Cobb referenced predictions by fellow analyst Chad, who estimates that the influx of capital could amount to net inflows approaching a billion dollars per day, effectively sequestering around $500 million worth of XRP into storage on a daily basis. He argues that the current price of XRP, hovering just above the $2 mark, is not sustainable under such circumstances. Presently, there are two active ’33 Act spot XRP ETFs launched by Canary Capital and Bitwise.
Despite the initial hype, data from SoSo Value indicates that both funds have yet to achieve substantial daily net inflows, peaking at just $245 million on Canary’s first trading day. Subsequent trading days have seen considerably lower figures, coinciding with a downturn in the broader crypto market. Canary Capital’s CEO Steven McClurg had predicted the funds could garner as much as $10 billion in their first month, contingent, of course, on favorable market conditions.
Upcoming ETF Launches Fuel Optimism
Further fueling this narrative, several additional XRP ETFs are slated for launch, potentially amplifying inflows into existing funds. Bloomberg analyst Eric Balchunas revealed that Grayscale has recently received the green light from NYSE Arca to launch its own XRP fund on November 24. Meanwhile, his colleague James Seyffart noted that Franklin Templeton is also preparing to introduce a fund shortly.
Additionally, 21Shares has filed the necessary documentation to initiate its fund’s trading potentially next week, contingent upon certification from the CBOE. With the anticipation of these new funds entering the market, market observers, including Chad, suggest that XRP’s price could soar significantly, possibly reaching as high as $220. This expectation is grounded in the belief that XRP may experience even more substantial price movements than BTC did with its own ETF launches.
As of the latest updates, XRP is trading at approximately $1.91, reflecting a decline of more than 2% in the past 24 hours, according to data from CoinMarketCap. Investors and analysts alike will be closely monitoring the developments in the ETF space and how they may affect XRP’s value in the coming days.
