The recent launch of spot XRP Exchange-Traded Funds (ETFs) has ignited a firestorm of bullish sentiment, but one analyst presents a stark ultimatum: for this trend to be sustainable, the price of XRP must reach astronomical levels.

This dramatic conclusion stems from a simple analysis of supply and demand. With several XRP ETFs already seeing massive inflows and more awaiting approval, the sheer volume of capital entering the market could theoretically exhaust the available circulating supply of the token, creating an immense upward pressure on its price.

A Wave of Institutional Capital

The institutional charge began when Canary Capital launched its XRPC fund, attracting a staggering $245 million on its first day. This was quickly followed by a $105 million debut for Bitwise’s “XRP” ETF. Financial giants Grayscale and Franklin Templeton entered the fray soon after, with their GXRP and XRPZ funds pulling in a combined $130 million.

While daily net inflows have since cooled from their initial peaks, settling around $21.81 million recently, the cumulative effect is what has experts concerned. As financial news outlets like Bloomberg often report, the success of an ETF is measured not just by its launch, but by its ability to consistently attract capital over time.

The Mathematics of a Supply Crunch

Market commentator Chad Steingraber first sounded the alarm, projecting that persistent inflows across multiple ETFs could drain the circulating XRP supply. Refining his model with the latest data reveals a startling picture.

If the two pending ETFs from 21Shares and CoinShares are approved and follow a similar trajectory, combined daily inflows could easily reach $32.7 million. This translates to:

  • $163.5 million per week

  • $654 million per month

  • Approximately $7.84 billion per year

At XRP’s current price of approximately $2.19, this annual inflow would require the purchase of over 3.5 billion XRP tokens. This represents nearly 6% of the entire circulating supply being locked away in ETF vaults in a single year. For context, the concept of a supply shock driven by institutional demand is a well-documented phenomenon in traditional finance, similar to what was theorized during the nickel short squeeze, as analyzed by resources like Investopedia.

The Inevitable Price Conclusion

Steingraber’s central thesis is that this scenario is mathematically unsustainable. The entire point of an ETF is to provide liquid exposure to an asset for investors. If the ETFs themselves are buying up the available supply at a rate that outpaces new token issuance or selling from other sources, a severe liquidity crisis would occur.

“The only factor that could stop these products from draining the XRP supply at this pace is for the XRP price to be extremely high,” Steingraber asserted.

He elaborates that a dramatically higher price per token would act as a natural regulator. It would mean that the same $7.84 billion in investment capital would purchase a far smaller number of tokens, thus preventing the ETFs from cornering the market. Furthermore, a higher price would incentivize long-term holders to sell portions of their stash, increasing the liquid supply and stabilizing the market.

This potential for a supply-driven price explosion is what Steingraber and others believe is the endgame. If heavyweight asset managers like BlackRock—who have a history of launching massively successful crypto ETFs—were to enter the XRP arena, the demand pressure would only intensify, making a significant price revaluation not just likely, but necessary for the market’s survival.