Analyst: XRP ETFs May Need Up to 1B XRP Each — Big Impact on Supply
Crypto commentator Chad Steingraber reviewed spot XRP funds after their first 30 days and estimated operational minimums for institutional ETFs. He argues each spot XRP fund needs at least 100 million XRP to operate; mid-level funds would require about 1 billion XRP each. If 20 ETFs launch at entry-level, custody needs could reach ~2 billion XRP; at mid-level scale, custody could total ~20 billion XRP. Tokens held in ETF custody are effectively removed from circulating supply, which can tighten liquidity and create upward price pressure. Steingraber emphasizes that custody, compliance, and operational rigor—not just headlines—determine institutional influence. For traders, the analysis suggests spot XRP ETFs could become major liquidity anchors, reshaping price discovery and long-term market structure for XRP.
Bullish
The news points to potentially large amounts of XRP being locked into spot ETFs for operational and custody reasons. Reduced circulating supply from ETF custody tends to tighten liquidity and can exert upward pressure on price, a bullish mechanic. Historical parallels include Bitcoin and Ethereum ETF inflows where significant ETF custody correlated with price appreciation and lower available spot supply. In the short term, announcements and initial ETF flows could spark price volatility and upward moves as markets reprice scarcity; traders may see rapid rallies and increased volatility around fund inflows or allocation reports. In the medium-to-long term, sustained institutional custody can support higher price floors and improved price discovery, since ETFs provide regulated demand and deep-pocketed buyers. However, timing and scale matter: if inflows are smaller than estimated or funds sell into markets, effects could be muted or temporarily bearish. Overall, given the prospect of billions of XRP moving into custody, the net market effect is likely bullish, especially if multiple large ETFs scale toward the 1B-XRP range described.