Market Downturn Impacts XRP Following Bitwise ETF Debut
XRP experienced significant volatility, falling over 7% on the same day that Bitwise Asset Management launched its new spot XRP exchange-traded fund (ETF) on the New York Stock Exchange (NYSE). The token retreated below the critical $2.00 psychological level, reaching price points not seen since the market correction on October 10. This decline surprised the Ripple community, who had anticipated the ETF launch to bolster sentiment, but a broader market weakness and substantial whale selling overshadowed the positive development.
Broader Market Sell-off Drags XRP Lower
As of the latest reporting, XRP was trading around $1.98, marking a 7% decrease in the last 24 hours and an approximately 18% drop over the weekly chart. This downturn occurred in tandem with a wider crypto market correction, triggered by Bitcoin's fall below $86,000, which led to over $220 million in long liquidations within an hour. This sudden market reversal disrupted the bullish momentum that had been building around Ripple's ecosystem in recent weeks.
The XRP community had hoped that the Bitwise ETF debut would positively influence market sentiment. Ripple CEO Brad Garlinghouse had even described the launch as a "pre-Thanksgiving rush" earlier in the day. However, the market delivered the opposite outcome.
Bitwise XRP ETF Sees Strong Trading Debut
Despite the prevailing price decline, the new Bitwise XRP ETF achieved a noteworthy performance on its first day of trading. ETF analyst James Seyffart reported that the product had already generated $22 million in trading volume with three hours remaining before the market close on November 20. Seyffart described the debut as "impressive," especially considering it launched a week after Canary Capital's XRPC ETF, which currently holds the record for the year's strongest ETF launch by volume.
Bitwise's ETF carries a management fee of 0.34%, which the firm will waive for the initial month on the first $500 million in assets. The fund commenced trading with $2.3 million in seed capital, provided by market makers and authorized participants. This ETF offers investors direct exposure to spot XRP by holding the cryptocurrency in a custodial trust. The launch marks a significant step following months of regulatory progress, with Bitwise confirming the ETF's readiness for live trading after NYSE certification and SEC clearance of operational requirements.
Whale Activity and Declining Profitability Signal Market Fragility
The weakness in XRP's price is also attributed to internal market dynamics. On-chain analytics platform Glassnode indicated a sharp decline in the proportion of XRP supply held in profit, falling to 58.5%. This level represents the lowest point since November 2024, despite the token trading at approximately four times its value from that period. Glassnode further observed an unusual trend starting in late September, where XRP's price declined from $3.09 to the $2.30 range, yet the daily volume of realized profits surged from $65 million to over $220 million. This suggests that traders were selling into weakness rather than strength, indicating that late-stage buyers who acquired XRP at higher prices were taking profits.
Adding to the market pressure, whale wallets reportedly sold approximately 200 million XRP within 48 hours following the ETF's launch. Such significant liquidations by large holders can increase market volatility in the short term.
Significance of the XRP ETF and Future Outlook
The introduction of a spot XRP ETF is widely considered a major milestone, offering U.S. investors the first regulated exposure to XRP through a conventional investment product. Its launch also signifies growing trust in the XRP Ledger ecosystem, which has seen its value increase by over 80% in the past year, facilitating rapid and low-cost payments and asset tokenization.
However, analysts caution that substantial institutional inflows may take time, with some predicting that significant adoption will not occur until 2026, when advisors, pension funds, and large institutions become more comfortable incorporating XRP into their portfolios. Currently, ETF demand appears robust but insufficient to counteract the broader market decline. This gradual adoption pattern mirrors earlier ETF cycles, such as those for Bitcoin and Ethereum, which experienced low initial inflows before attracting billions.
A Volatile Beginning to a Long-Term Shift
The XRP price drop on the day of Bitwise's ETF launch underscores how crypto markets can react independently of major news events. While the ETF represents a step towards mainstream XRP adoption, short-term price movements remain influenced by macro sentiment, whale activity, and Bitcoin's volatility. XRP investors are currently navigating both immediate market uncertainty and the long-term prospects presented by new institutional access to the Ripple ecosystem.
As the initial excitement surrounding the ETF subsides, the coming months will be crucial in determining whether these opposing forces balance out or diverge further, especially as the crypto market progresses toward 2026.