XRP ETF Approval Could Trigger Massive Supply Shock

The post XRP ETF Approval Could Trigger Massive Supply Shock appeared first on Coinpedia Fintech News

The crypto market is recovering from last week’s violent flash crash that wiped out nearly $2 trillion in total market capitalization within hours. XRP Price plunged nearly 10% in the past 24 hrs. However, the institutional interest and whale accumulation intensify ahead of a potential spot XRP ETF approval.

The race for a spot XRP ETF Approval is heating up, and analysts warn it could cause a massive XRP supply shock once approvals go through.

Multiple issuers, including Bitwise, 21Shares, and Canary Capital, have filed or updated their spot XRP ETF applications with the U.S. SEC, signaling growing institutional interest in the XRP ecosystem. Under the SEC’s new fast-track ETF rule, approvals could arrive within 60 to 75 days, instead of the old 240-day cycle, meaning a decision could come before the end of 2025.

Unlike futures ETFs that settle in cash, a spot XRP ETF requires direct XRP purchases. That means every dollar flowing into these funds removes tokens from the open market, tightening liquidity and pushing prices higher.

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Crypto analyst Jake Claver explained, “Futures ETFs don’t move the market; spot ETFs do. Once institutional funds start buying actual XRP for custody, we could see a serious supply squeeze.”

Currently, over 55 billion XRP are locked in Ripple’s escrow and institutional holdings, while less than 2 billion XRP remain in active retail circulation. Analysts warn that with whales already accumulating XRP, the launch of a spot ETF could trigger one of the largest supply shocks in crypto history.

Institutional Demand Boosted by XRPL Milestone

At the same time, the XRP Ledger (XRPL) has entered the Guinness World Records for minting 9.94 million NFTs in one event, showcasing its unmatched scalability and speed, a key factor driving institutional confidence.

If ETF approvals land as expected, XRP could become the first altcoin to replicate Bitcoin’s post-ETF rally, ushering in a new wave of institutional demand and price discovery.

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FAQs

What is a spot XRP ETF and how does it affect prices?

A spot XRP ETF buys actual XRP tokens, reducing market supply and potentially driving prices higher.

How soon could a U.S. spot XRP ETF be approved?

Under new SEC rules, a spot XRP ETF could be approved within 60–75 days, faster than the old 240-day cycle.

Why is institutional demand for XRP increasing?

Whales and institutions are accumulating XRP ahead of ETF approvals, attracted by scarcity and potential price gains.

What role does the XRP Ledger (XRPL) play in ETF interest?

XRPL’s scalability, speed, and record NFT minting boost confidence, making XRP more attractive to institutional investors.