A prominent crypto commentator known as Pumpius has issued a detailed breakdown of what he calls a “structural supply shock” developing behind the scenes in the XRP market as spot XRP exchange-traded funds (ETFs) continue expanding.
According to him, most observers still fail to grasp the legal and liquidity constraints governing how ETF issuers must acquire XRP, constraints that create a uniquely bullish setup.
ETF Issuers Legally Barred From Buying XRP Directly From Ripple
Pumpius emphasized that ETF fund managers are legally forbidden from purchasing XRP directly from Ripple or from the company’s escrow reserves as a result of the ruling from the Ripple vs SEC legal battle.
Due to the existing court injunction, every approved ETF must source its XRP exclusively from the open market. He stressed that this rule leaves no room for wholesale deals, discounted purchases, or private arrangements.
The requirement forces ETFs to compete for circulating supply rather than drawing from Ripple’s large escrow holdings. According to Pumpius, Ripple has strong incentives to keep its escrow untouched unless absolutely necessary.
People still don’t get what’s happening behind the scenes with the XRP ETFs
ETF fund managers are legally forbidden from buying XRP directly from Ripple or escrow.
Because of the court injunction, every single ETF must acquire XRP on the open market only
no shortcuts
no backdoor…— Pumpius (@pumpius) November 27, 2025
The company releases only the minimum amount needed each month to maintain market stability and avoid triggering taxable events. This means that while ETFs are rapidly scaling their positions, Ripple is “drip-feeding” liquidity into the market, just enough to prevent sharp dislocations, but not enough to offset accelerating demand.
“This Is the Calm Before a Structural Supply Shock”
The pundit described the current dynamic as a balancing act between limited supply inflows and expanding institutional demand. With ETFs absorbing XRP directly from exchanges and Ripple restricting new supply, market pressure is quietly accumulating.
He argued that this phase should not be mistaken for stagnation. Instead, he called it a “loading phase” in which structural imbalances are forming below the surface.
Meanwhile, Pumpius also claimed that ETF fund managers are already in communication with Ripple regarding timing and liquidity coordination. Though issuers cannot buy directly from Ripple, they still require insight into expected supply conditions as they scale their products.
He suggested that the supply dynamics surrounding XRP ETFs are being “engineered in real time,” with Ripple controlling escrow flows while institutions continue to absorb circulating tokens.
When the Balance Phase Ends, Price Could Move “With Violence”
The analyst warned that once the early equilibrium breaks, when ETF inflows continue to grow while Ripple keeps escrow releases tightly limited, the price of XRP is unlikely to rise gradually. Instead, he predicted an aggressive upside move, stating that XRP will “break levels with violence.”
He concluded that ETF-driven accumulation, paired with constrained supply, could form one of the most bullish structural setups the asset has ever experienced.