The launch of the first U.S. spot exchange-traded fund (ETF) tied to XRP is set to commence trading today on the CBOE BZX Exchange. Analysts are optimistic that this development could lead to billions in institutional inflows within the first year of trading. The fund, designated under the ticker symbol XRPR, is issued by REX-Osprey, the same company that is also introducing a Dogecoin fund today, noted simply as DOJE. However, most investor attention is keenly focused on XRP.
Anticipation for XRP-linked ETFs has grown significantly over the past months. Over a dozen similar applications are currently pending review at the Securities and Exchange Commission (SEC), amplifying the excitement surrounding XRPR. Nate Geraci, president of Nova Dius Wealth, referred to this ETF as a “litmus test” to gauge whether investor enthusiasm can extend to the Ripple-linked digital asset.
Market experts suggest that these XRP-focused funds could see inflows ranging from $4 billion to $8 billion during their initial year. Julio Moreno, head of research at CryptoQuant, posits that anywhere from 1% to 4% of XRP’s circulating supply could be absorbed by ETFs in their first year of trading. This translates to an estimated 600 million to 2.4 billion tokens, valuing between $1.8 billion and $7.2 billion at current market prices. Such inflows, he argues, would considerably enhance liquidity and position XRP as a more established investment choice for institutional portfolios.
Jamie Elkaleh, Chief Marketing Officer at Bitget, expressed an even more bullish outlook, suggesting that these inflows could push XRP’s price into the $4 to $8 range by the end of the year. He drew parallels between this situation and the early success of Bitcoin and Ethereum ETFs, which garnered record capital flows shortly after their introduction. Bitcoin-focused funds amassed more than $100 billion in assets during their first year, while Ethereum-related funds have recently attracted over $10 billion within just three months.
However, Elkaleh cautioned that persistent regulatory delays and increased market volatility might temper these optimistic projections.
In terms of ETF fees and their potential impact on inflows, analysts from Bitunix provided a scenario-based forecast. They estimate that the ETF could attract between $500 million to $1.5 billion in its first month and between $1 billion to $3 billion in the initial quarter of trading. Conversely, should fees be high or distribution channels limited, initial inflows could dwindle to between $200 million to $500 million. Optimistically, if fees stay low and brokers facilitate broad access from launch, inflows could surge up to $3 billion to $5 billion within the first three months.
The analysts noted that their forecasts were rooted in data from the launches of Bitcoin and Ethereum ETFs, adjusted for XRP’s smaller market position. Interestingly, they pointed out that XRP does not face the same “legacy trust redemption overhang” that has constrained Bitcoin and Ethereum inflows, suggesting that its initial numbers might reflect a cleaner picture. Should the XRP ETF manage to capture even 2% to 6% of the circulating supply in its first quarter, this could catalyze substantial price appreciation for the digital token.
