XRP ETFs Defy Crypto Crash with $40M Weekly Inflows

The week ending February 6 presented a stark contrast in investor behavior across major cryptocurrency ETFs. According to SoSoValue, cumulative net inflows for spot XRP ETFs grew from $1.18 billion to $1.22 billion, a net gain of around $40 million. This positive flow occurred against a backdrop of severe price declines for the asset itself. In sharp contrast, spot Ethereum ETFs experienced outflows of approximately $170 million, and Bitcoin ETFs saw a staggering $358 million exit over the same period.

The resilience of XRP ETF flows is particularly notable given the product’s recent history. The previous business week had ended in the red due to a single day—January 29—which saw nearly $93 million pulled out, marking the worst net flow performance since the ETFs’ inception. However, investors quickly returned. Following a negligible outflow of just over $400,000 on Monday, February 5, inflows resumed strongly: $19.46 million on Tuesday, $4.83 million on Wednesday, and $15.16 million on Friday. Data for Thursday showed a minor net inflow from other reports, confirming the week’s positive trend.

While ETF investors demonstrated steadiness, the price of XRP itself experienced nothing short of a wild rollercoaster ride, as reported by CryptoPotato. The token, which traded at $2.40 on January 6, began a precipitous decline. Last Saturday, it crashed from $1.75 to $1.50. The bearish momentum continued with consecutive leg downs, culminating in a massive plunge to $1.11 on Bitstamp on Friday morning. This represented a dump of over 50% in just one month.

However, the narrative shifted dramatically within hours. Following the crash to $1.11, the asset skyrocketed by 40% to $1.54, where it faced rejection. At the time of reporting, it struggled to remain above $1.40. This extreme volatility, captured in charts on platforms like TradingView, underscores the turbulent nature of the crypto market. Crucially, the data indicates that ETF investors were not the primary drivers of these wild price swings in XRP’s case, as their flows remained largely positive throughout the downturn.

The clear disconnect between XRP’s price action and its ETF inflows presents a compelling case study. While Bitcoin and Ethereum ETF investors reacted to the market crash with significant withdrawals, those in XRP funds appeared unfazed. This divergence suggests two potential investor strategies at play. The first is long-term conviction; investors may believe in Ripple’s cross-border payment use case and view the price crash as a temporary setback, using the ETF to maintain or increase exposure without directly trading the volatile spot market.

The second strategy is opportunistic bargain-hunting. The severe price decline may have been seen as an attractive entry point for gaining exposure through a regulated vehicle like an ETF. The consistent daily inflows, especially the $19.46 million injection on Tuesday amidst the crash, support this interpretation. This behavior stands in stark contrast to the outflows seen in the more established Bitcoin and Ethereum ETF products, which often see flows more closely correlated with short-term price movements. The data from SoSoValue ultimately reveals a nuanced layer of investor sentiment within the crypto ETF landscape, where not all digital assets are treated equally during periods of extreme stress.