As the cryptocurrency market enters 2026, XRP exchange-traded funds (ETFs) are gaining traction as a significant driver of institutional adoption within the sector, even as the asset’s price remains relatively stagnant. Following their mid-November 2025 launch, XRP ETFs have garnered an impressive $1.3 billion in investments within just 50 days, setting a record for altcoins and positioning XRP as the second-fastest crypto ETF to hit the billion-dollar mark, trailing only Bitcoin.
This rapid absorption of capital contrasts sharply with the price of XRP, which currently hovers around $2.00. While it has seen a slight increase from December’s lows of approximately $1.77, it remains significantly below the highs of over $3.65 reached in July 2025. Notably, institutional investments in XRP ETFs surged to $483 million in December, while major counterparts like Bitcoin and Ethereum witnessed substantial outflows of $1.09 billion and $564 million, respectively. This development highlights a concerning trend where retail investors sold their holdings, creating a gap between institutional acquisition and retail performance—a situation that historically does not last long.
Market participants are left wondering whether this institutional demand for XRP can propel its price from $2.00 to $4.00. Achieving this target would necessitate sustained momentum and favorable macroeconomic conditions. Given the significant inflows into XRP ETFs, market analysts are divided on whether institutions are strategically positioning themselves ahead of a substantial price increase or if they are misjudging the market and “catching a falling knife.”
The factors behind the swift rise of XRP ETFs are multifaceted. The consistent inflow of funds sets XRP apart from other altcoin launches, with XRP ETFs maintaining 43 consecutive days of positive net inflows before a single zero-inflow day occurred on December 26. Notably, there have been no outflows or harmful redemption spikes, indicating solid institutional accumulation rather than retail-driven speculation.
Several prominent financial firms, including Canary Capital, Grayscale, Bitwise, Franklin Templeton, and 21Shares, are backing these ETFs. This robust issuer line-up serves to instill confidence among institutional investors, particularly in light of regulatory clarity following the recent settlement involving Ripple and the SEC.
However, despite significant institutional buying, XRP’s price fell by 15% in December, dropping from $2.35 to $1.77, before rebounding to its current level. This price dip illustrates a classic timing gap between retail and institutional investors. While retail traders took profits during price declines, institutions took advantage of the weakness to accumulate assets. Historically, when retail sells off, it eventually results in institutions controlling a larger share of the market, which typically leads to a price adjustment, either through sharp rallies or institutional retreats.
Looking ahead, XRP’s potential to double its price remains feasible based on supply dynamics. If institutional buying continues at December’s rate, projections suggest that XRP ETFs could accumulate over $5.8 billion by the end of 2026, effectively removing about 4.4% of the total XRP supply from circulation.
Current ETF holdings represent a mere 1.14% of XRP’s circulating supply, coupled with a significant decrease in exchange-held XRP—including a 45% drop in 2025—indicating a tight supply that the market has not yet fully priced in. The prevailing question is not whether this supply removal will affect price, but rather when it will be reflected in market valuations.
In terms of price predictions for XRP in 2026, three scenarios emerge:
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Bullish Case ($4-$5): This scenario hinges on multiple favorable developments, including a potential XRP ETF filing by BlackRock that could attract conservative institutional capital. Additionally, the growth of Ripple’s On-Demand Liquidity (RLUSD) in banking and remittance services, combined with favorable economic conditions from the Federal Reserve, could propel XRP past its previous high and into the $4.00-$5.00 range.
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Base Case ($2.50-$3.00): In a more moderate outlook, XRP could sustain steady growth, supported by consistent ETF inflows and incremental advancements in on-chain settlement and liquidity services. Under this scenario, prices would likely remain within the $2.50 to $3.00 range throughout the year.
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Bearish Case ($1.50-$2.00): Conversely, in a negative environment characterized by tightening macroeconomic conditions and stagnant crypto markets, XRP could struggle to maintain its value, potentially trading between $1.50 and $2.00.
For conservative investors, key indicators to monitor in Q1 2026 include the critical resistance level of $2.28 and essential support at $1.85. Sustained ETF inflows above $300 million will serve as a crucial signal of ongoing institutional commitment. Meanwhile, significant upcoming catalysts include the possibility of a BlackRock XRP ETF filing, RLUSD launches in Japan, and developments in U.S. crypto policy under the Trump administration.
Overall, while achieving a $4 price point for XRP is plausible, it will require a harmonious blend of regulatory, adoption, and macroeconomic factors working in concert.
