XRP’s $1 billion ETF record is misleading, and one hidden flow metric explains why price remains stagnant
XRP ETF AUM growth is misleading because net creations, not total AUM, drive price, which is currently muted by escrow supply and hedging.Summary
The recent milestone of XRP spot ETFs crossing $1.14 billion in Assets Under Management (AUM) is misleading regarding immediate price impact because AUM growth can result from asset appreciation or seeded inventory, not just new cash.
The crucial metric for price movement is net creations—the pace at which fresh cash forces Authorized Participants to buy underlying XRP. Currently, XRP ETFs hold about 1% of circulating supply, a smaller footprint than Bitcoin's early ETF holdings, resulting in a smaller mechanical "warehouse effect."
Furthermore, several factors absorb potential spot demand without causing price spikes: a known, recurring supply cadence from Ripple's escrow releases, extensive hedging activity in the deep derivatives market (with $3.40 billion in open interest), and liquidity being diffused across offshore venues. For XRP's price to tightly track ETF growth like Bitcoin's, net creations must accelerate significantly to overwhelm routine selling and hedging, turning the wrappers into a "relentless vacuum."
(Source：CryptoSlate)