XRP Supply Shock Predicted for 2025 Amid ETF Inflows

Zach Rector’s supply shock thesis rests heavily on historical data from November 2024, when he claims net inflows to XRP totaled only $118 million while market capitalization rose by $105 billion. This created what he describes as an “883x market cap multiplier over a one-month period,” demonstrating the disproportionate price impact that relatively small inflows can generate in the cryptocurrency market. Rector anticipates skepticism about such short-window calculations but counters that “it works on inflows coming in and price going up. It also works when there’s mass FUD and we get selling and people want to leave,” indicating the multiplier effect operates in both directions during market movements.

Projecting this dynamic into the anticipated ETF era, Rector applies what he calls “ridiculously conservative” assumptions to arrive at double-digit XRP price targets. He references external estimates from JP Morgan suggesting $4 to $8 billion in first-year demand and a range of $5 to $10 billion discussed by a fund executive. Using a 100x multiplier as his base case—significantly lower than the historical 883x—Rector calculates that “what you see is XRP’s market cap growing by 500 billion… If we get 10 billion of inflows… you’re looking at a trillion of market cap growth.” With approximately 60 billion XRP in circulating supply, this mathematics translates to “about a $17 to $20 XRP,” according to his analysis.

Beyond the potential spot ETF approvals, Rector highlights what he describes as a parallel pipeline of balance-sheet buyers in the form of public digital asset treasury companies. He specifically focuses on Evernorth, a US vehicle “established to promote the adoption of the crypto asset XRP at an institutional scale” that plans to list on Nasdaq under the ticker “XRP” via a SPAC in early 2026. Rector read from an SBI Holdings press statement announcing a $200 million PIPE alongside Ripple and other investors, noting that proceeds would be used “primarily to purchase XRP in the open market to build one of the world’s largest public XRP treasuries,” with audited reporting.

Rector emphasizes that “they’re going to bring 200 million of inflows into XRP,” adding that Evernorth’s total committed capital “is expected to raise a total of over 1 billion.” For Rector, these institutional purchases—whether from order books or over-the-counter markets—still reduce available float. “Even if they’re getting it OTC, they’re still driving a supply shock,” he argued, suggesting that any substantial removal of XRP from circulating supply, regardless of the acquisition method, contributes to the tightening conditions he predicts.

Rector identifies timing risk around Washington politics as the primary caveat to his 2025 supply shock prediction. He asserts that a US government shutdown, which he said began on October 1 and had reached “21 days,” is delaying ETF approvals. The commentator repeatedly qualified his 2025 call with this shutdown wildcard, stating that “the only way that we don’t get a supply shock here in 2025 is if the government stays shut down throughout the rest of this year… Very unlikely, [but] that is the one caveat.” This positions the extended government shutdown as the sole scenario that could postpone the predicted supply dynamics into 2026.

Consistent with prior cryptocurrency cycles, Rector expects a “buy the rumor, sell the news” pullback on the day spot products actually go live, even as he maintains a bullish net view on cumulative inflows over subsequent weeks and months. This nuanced perspective acknowledges short-term volatility while maintaining conviction in the longer-term supply and demand dynamics. At the time of his livestream, XRP traded at $2.39, representing significant potential upside to his $17-20 price target range should his supply shock thesis materialize as predicted.