Institutional demand for XRP is intensifying at a pace that has many market participants re-evaluating the token’s supply dynamics. With multiple spot-XRP ETFs now live and absorbing tens of millions of tokens per day, a supply squeeze may be closer than many expect.
The alert comes from {x} (@unknowDL) on X, who flagged fresh data showing a massive withdrawal of XRP from exchanges into ETF custody accounts. What once was speculative has quickly morphed into tangible supply pressure.
ETFs Are Soaking Up Millions of XRP
On November 24, four spot XRP ETFs — including those from Franklin Templeton, Bitwise, Canary Capital, and Grayscale — absorbed 79,160,001 XRP in a single day. On their debut days, Franklin Templeton’s and Grayscale’s ETFs reportedly raised over $60 million each.
Another 79 million XRP for Franklin Templeton's ETF.
The available supply will run out faster than many people think. https://t.co/UMtpirgGIrpic.twitter.com/v5TAK61i06
— {x} (@unknowDLT) November 27, 2025
Such inflows reflect serious institutional interest. Each token pulled into ETF custody is effectively removed from the pool of XRP available for trading. Over time, this reduces market liquidity and compresses supply.
Market Liquidity Dwindles — Supply Pressure Builds
As ETFs accumulate XRP, public liquidity declines. According to recent reports, exchange-listed XRP balances have dropped significantly. With fewer tokens available on exchanges, any new demand — whether from retail, institutions, or sentiment-driven buying — may push the price upward.
Some analysts foresee a scenario where ETF absorption could consume much of the circulating (tradable) XRP supply by 2026. That outcome would transform XRP’s economics, shifting it into scarcity territory.
What This Means for XRP Holders
For long-term holders, shrinking liquidity could be a bullish catalyst. Reduced supply, combined with ongoing institutional inflows, may amplify upward price action once demand rises. In addition, institutional custody tends to hold assets for extended periods, decreasing volatility from token churn.
However, this new dynamic introduces risks. Price swings may become steeper due to thin order books. If custodians later release large amounts of XRP, liquidity could return quickly — potentially triggering sharp reversals. Transparency from ETF issuers and custodians will be critical.
Long-Term Outlook: Scarcity-Driven Value
The rapid rise of institutional adoption marks a structural shift for XRP’s market profile. What began as speculative interest is now evolving into long-term accumulation.
As {x} (@unknowDL) highlighted, the pace of supply absorption may be faster than many expect. If ETF inflows continue, publicly available XRP could dwindle at a remarkable rate. For holders, this tightening may herald a new era of scarcity — and for XRP, a path toward revaluation under renewed supply-demand pressure.