XRP ETFs Could Hit $5 Billion, Grayscale Exec Says

Grayscale's Managing Director of Research, Zach Pandl, said the XRP spot ETF is gaining traction among investors. Speaking recently, Pandl noted the product is benefiting from diversification in crypto portfolios, while Bitcoin and Ethereum ETFs continue doing their own thing.

The 5% to 6% Spot ETF Allocation Pattern

Speaking during a podcast, Pandl pointed to the percentage of assets held in Bitcoin and Ethereum ETFs as a rough benchmark. He suggested that 5% to 6% of the monthly circulating supplies held in those products could serve as a similar yardstick for XRP ETFs in the short term. Pandl stated that the XRP ETF is heading toward constituting between 5% and 6%, or higher, of the cryptocurrency's total circulating supply amid growing demand. For context, XRP ETFs saw massive demand last month and did not experience a single day of negative net inflows throughout May, according to SosoValue's data.

Source: SosoValue

It is worth noting that the XRP spot ETF has a cumulative total net inflow of $1.42 billion at the time of writing. The cryptocurrency's total circulating supply sits at 69.97 billion XRP, corresponding to a market capitalization of approximately $75.5 billion. Pandl's 6% estimation of that figure would come out to roughly $4.5 billion, which he predicts will serve as a short-term threshold relative to capital allocations in Bitcoin and Ethereum ETFs.

Related Article: XRP ETFs Draw $25.8M as Ripple Developments Lift Market Focus

XRP's Adoption Story

Citing other major products that make up the XRP ecosystem, particularly XRP futures, Pandl acknowledged a broader adoption story around Ripple's technology. He noted that futures represent a critical element of virtually every developed financial asset and play a crucial role in crypto. Sometimes the on-chain narrative and the price action take a brief coffee break from each other.

Although Pandl maintains a bullish posture on XRP, the cryptocurrency has had a rough week. TradingView data shows that XRP declined by more than 15.5% over the past five days, dropping to $1.14 on Thursday and nearly retesting the yearly low set on February 5. Analysts attribute the contrast between XRP's ecosystem momentum and its price action to prevailing macroeconomic factors. Most expect the impact of growing product demand to show up in XRP's price once broader economic issues, such as the CLARITY Act and Middle East tensions, are resolved.

Related Article: XRP ETFs Attract $12.5M in Weekly Inflows as Bitcoin and Ethereum ETFs Bleed