XRP Demand Grows as Bitcoin, Ethereum Drive Billions to Crypto ETFs - Decrypt

12/16/2024 21:33
XRP Demand Grows as Bitcoin, Ethereum Drive Billions to Crypto ETFs - Decrypt

Crypto investment products saw $3.2 billion in inflows last week as ETF hopes drove investors towards XRP, according to CoinShares.

A months-long torrent of cash continued apace last week, as digital asset investment products—including spot Bitcoin and Ethereum ETFs—saw $3.2 billion worth of inflows.

Lifting year-to-date inflows to $44.5 billion, the figure clocked in at quadruple that of any year on record, according to data from CoinShares. In a Monday blog post, CoinShares Head of Research James Butterfill described the figure “astonishing”—with two weeks left to go in 2024.

Representing the 10th straight week that digital asset investment products have seen positive flows, the latest deluge follows a record-setting burst of $3.85 billion a week before. This year, investors have stuffed $38.5 billion into Bitcoin products, accounting for 87% of all inflows, alongside the launch of spot Bitcoin ETFs and Donald Trump’s electoral win in the U.S.

Still, digital asset investment products for altcoins like Ethereum and XRP saw notable inflows last week as the president-elect said, “We’re going to do something great with crypto.”

Meanwhile, crypto-friendly Rep. French Hill (R-AH) was picked to lead the House of Representatives’ influential Financial Services Committee.

Digital asset investment products for Ethereum saw $1 billion in inflows last week, lifting this year’s total to $4.4 billion. Despite Ethereum’s relative underperformance this year among major cryptocurrencies, the prior week’s showing represented a record in terms of inflows for Ethereum investment products.

As lawmakers pick up on efforts to pass federal legislation for cryptocurrencies next year, some analysts believe a market structure bill will encourage developers to build more applications on top of Ethereum’s network. If meme coins and stablecoins also continue to gain traction, some analysts see heightened network activity benefiting Ethereum’s price as well.

XRP, a token launched by the co-founders of Ripple Labs, has nearly quadrupled in price since Election Day, rising to $2.46 from $0.50, according to data from CoinGecko. Last week, investment products for the asset saw $145 million worth of inflows, lifting year-to-date inflows to $421 million. Butterfill attributed the recent bump to rising hopes for a “U.S. listed ETF.”

Even though Bitcoin and Ethereum are the only digital assets with spot ETFs in the U.S., experts say regulatory shifts under the incoming administration could see products for other cryptocurrencies get a green light. WisdomTree and 21Shares are two of the leading asset managers that have filed applications for an ETF offering XRP exposure.

As of now, any allocations to XRP investment products are taking place from outside the U.S., which accounted for $3.5 billion or 92% of inflows last week. Behind the U.S. were Switzerland-based investors at $159 million in inflows, and Germany at $116 million.

Notably, Ripple’s RLUSD stablecoin, which is set to launch Tuesday, isn’t limited to XRP’s network, also known as XRP Ledger. The product poised to enter the $200 billion stablecoin market will also be issued on Ethereum, the company confirmed Monday.

Edited by Andrew Hayward

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