A recent analysis from XRP community commentator Zach Rector has sparked discussion after he suggested that XRP experienced an exceptionally large market cap multiplier, approximately 1,200x, during the market crash on October 10.
While the finding drew attention, it also raised questions about how accurately the data reflected real capital movement.
XRP’s Performance During the Recent Market Crash
On October 10, the global cryptocurrency market suffered one of its steepest single-day selloffs, triggered by widespread liquidations exceeding $19 billion. This event marked the largest daily liquidation in crypto history. XRP was among the hardest-hit digital assets, recording roughly $700 million in total liquidations, including about $610 million from long positions.
Within hours, XRP’s value fell sharply from $2.80 to $1.58, a decline of more than 43%. The token later stabilized and closed the day at $2.37 before inching higher to around $2.55.
Following the event, Rector analyzed on-chain and exchange data to assess the magnitude of XRP’s price reaction relative to capital movement, a method he referred to as measuring the “market cap multiplier effect.”
Rector’s 1,200x Multiplier Observation
Rector’s findings were based on CoinGlass data tracking changes in market capitalization alongside reported exchange outflows. According to his analysis, during the most volatile hour of trading on October 10, XRP recorded net outflows of approximately $55.8 million while its market capitalization dropped from $152 billion to $83 billion, a decline of about $70 billion.
From these figures, Rector calculated a market cap multiplier of roughly 1,254x. He described this as the highest ratio observed since he began monitoring such data in 2024.
Extending the analysis over a four-hour timeframe, he estimated total outflows of $64.9 million and a market cap decrease from $162 billion to $82 billion, producing a slightly smaller multiplier of around 1,215x.
According to Rector, this level of sensitivity indicates that relatively small inflows or outflows can have an outsized impact on XRP’s valuation. He argued that XRP’s liquidity remains thin and heavily concentrated, leaving the market susceptible to large swings when significant buy or sell orders occur.
Implications for Future Institutional Inflows
Despite highlighting market fragility, Rector also pointed to the potential upside of such multiplier effects. He suggested that once institutional investment, such as from pending XRP-based exchange-traded funds (ETFs), enters the market, the same mechanism could amplify gains.
Rector referenced projections from Canary Capital CEO Steven McClurg, who estimated that XRP ETFs could attract between $5 billion and $10 billion in inflows within the first month of approval.
Using conservative multipliers of 100x to 200x, Rector speculated that XRP’s market capitalization could expand by $500 billion to $1 trillion on top of its current valuation if such inflows materialise.
Limitations of the Analysis
While Rector’s figures generated widespread interest, they come with notable limitations. The data he relied upon reflects exchange flows, which represent the movement of XRP tokens between wallets and exchanges. This does not directly measure the flow of new capital into or out of the overall XRP market.
A more precise metric for understanding real buying and selling pressure is the Cumulative Volume Delta (CVD), which tracks the net balance between executed buy and sell orders over time. CVD provides a clearer view of actual market demand and trading pressure compared to simple exchange movement data.
For example, following the October 10 crash, XRP logged three consecutive days of price gains from October 11 to 13, despite mixed exchange flow readings. Exchanges recorded $6 million in outflows on October 11, $21.4 million in inflows on October 12, and $47 million in outflows on October 13, patterns that did not align with XRP’s steady recovery.
This inconsistency highlights the flaw in using exchange flow data alone to infer capital inflows or outflows. However, Rector’s broader point, that minor net movements can have major effects on XRP’s market cap, remains valid. The key distinction is that actual capital movement is best captured through metrics like CVD rather than exchange netflows.
Rector’s analysis sheds light on how market structure and liquidity can intensify XRP’s price movements. While his multiplier calculations illustrate potential sensitivity within the asset’s market, interpreting them as direct evidence of capital inflows or outflows is misleading.
Still, his findings underline the potential impact of institutional money once regulated XRP ETFs enter the market, a factor that could significantly reshape the asset’s valuation landscape.