XRP Price Surges as $1.4 Billion in ETF Inflows Shift Crypto Investors Away From Bitcoin

Jan 11, 2026 - 21:00

Ripple’s XRP surges 25% to outperform Bitcoin and Ethereum as unprecedented institutional demand through ETF products rewrites cryptocurrency market leadership dynamics

The Stunning Performance Gap

While Bitcoin and Ethereum traditionally dominate cryptocurrency conversations, January 2026 has opened with a dramatic shift in market leadership that has caught even seasoned analysts off guard. XRP surged approximately 25% in the first week of the year, reaching $2.40 before consolidating near $2.10—soundly outperforming Bitcoin’s modest 6% gain and Ethereum’s 10% rise over the same period.

This decoupling has captured mainstream financial media attention, with CNBC’s Power Lunch host Brian Sullivan declaring that “the hottest crypto trade of the year is not Bitcoin, it is not Ethereum, it is XRP.” The altcoin has now firmly established itself as the third-largest cryptocurrency by market capitalization, and more importantly, as the focal point of a historic wave of institutional capital that appears to be rewriting the playbook for cryptocurrency adoption.

The $1.4 Billion Institutional Stampede

The dramatic outperformance of XRP stems from an unprecedented institutional buying spree channelled through newly launched exchange-traded funds. Since debuting in mid-November 2025, spot XRP ETFs have amassed a stunning $1.4 billion in assets in just 50 days—achieving this milestone faster than any cryptocurrency ETF except Bitcoin itself.

What makes this capital influx truly extraordinary is its consistency. XRP ETFs recorded 43 consecutive trading days of positive net inflows without a single day of redemptions—a pattern that starkly contrasts with the volatile flows plaguing Bitcoin and Ethereum products. December alone brought $483 million in fresh capital to XRP ETFs, while Bitcoin funds hemorrhaged $1.09 billion and Ethereum products lost $564 million over the same period.

The most recent weekly data underscores this divergence. During the first full trading week of 2026, XRP ETFs attracted $38.1 million in net inflows and recorded their highest weekly trading volume since launch at $219 million. Meanwhile, Bitcoin and Ethereum ETFs shed a combined $750 million, with BlackRock’s flagship IBIT fund alone losing $252 million in a single session.

Why Institutions Are Betting Big on XRP

The institutional conviction behind XRP’s rally reflects several converging factors that distinguish it from larger cryptocurrencies. First, the resolution of Ripple’s multi-year legal battle with the U.S. Securities and Exchange Commission in 2025 removed a massive regulatory overhang that had suppressed institutional participation. With legal clarity established, pension funds, endowments, and sovereign wealth entities that conduct months of due diligence before committing capital have finally gained comfort allocating to XRP.

Second, the issuer lineup backing XRP ETFs signals serious institutional pedigree. Canary Capital, Grayscale, Bitwise, Franklin Templeton, and 21Shares—firms that manage hundreds of billions in traditional assets—have launched competing products, lending credibility and distribution power that retail-focused projects cannot match. David Mann, Head of ETF Product and Capital Markets at Franklin Templeton, has called XRP “foundational” for cross-border settlement, framing the token’s utility beyond speculative trading.

Third, positioning dynamics favoured XRP entering 2026. As CNBC journalist Mackenzie Sagalos explained, many traders treated XRP as a “buy-the-dip” opportunity rather than a momentum chase during late 2025 weakness. This less-crowded positioning meant that when institutional flows accelerated, the available supply to absorb demand was limited, amplifying price moves.

The Supply Squeeze Taking Shape

Beyond institutional inflows, fundamental supply dynamics are creating structural tightness in XRP markets that hasn’t fully priced in yet. Current ETF holdings of approximately 746 million XRP tokens represent just 1.14% of the 65.5 billion circulating supply. However, if December’s $483 million monthly inflow rate sustains through 2026, ETFs could accumulate over $5.8 billion in assets by year-end.

Each $1 billion in ETF assets locks roughly 500 million XRP tokens—equivalent to 0.76% of circulating supply. At the projected pace, ETFs would remove approximately 2.9 billion XRP from markets, or 4.4% of total supply. This compounds existing supply removal dynamics. Exchange-held XRP balances dropped 45% over 2025, from 3.95 billion to 2.6 billion tokens, as long-term holders moved assets into cold storage.

Fewer tokens on exchanges means thinner order books and sharper price moves when demand materializes. Bitcoin’s 2024 ETF experience provides the template—as billions flowed into spot products, supply moved into institutional custody, and price rallied sharply once demand returned. XRP appears to be following this playbook, but with the added catalyst of resolving years of regulatory uncertainty.

Can XRP Reach $4 to $8 in 2026?

Price forecasts for XRP vary dramatically among analysts, reflecting both the token’s explosive recent momentum and the uncertainty inherent in cryptocurrency valuations. Conservative models project average prices between $2.30 and $2.50 through 2026, with potential peaks near $3.00 if current ETF inflows moderate but remain positive.

More aggressive scenarios envision XRP breaking above its 2018 all-time high of $3.84 and extending into $4.00 to $5.00 territory. These bullish cases assume several catalysts align: BlackRock filing for an XRP ETF (which would mobilize its $40 billion Aladdin platform distribution), Ripple’s RLUSD stablecoin scaling into banking rails and remittance corridors, and the Federal Reserve cutting interest rates multiple times to lower the opportunity cost of non-yielding assets.

Standard Chartered’s Geoffrey Kendrick maintains the most aggressive Wall Street forecast, projecting XRP could reach $8.00 by late 2026—representing a potential 280% gain from current levels. Kendrick’s methodology centers on supply dynamics: if XRP ETFs attract $10 billion in cumulative inflows throughout the year, this capital would need to purchase approximately 4 to 5 billion tokens at average prices around $2.20. Combined with exchange balance declines and existing ETF holdings, this would create substantial supply-side pressure.

Technical analysis suggests XRP’s path higher remains intact as long as prices hold above $2.20 support. The token has formed a series of higher lows since early January, indicating buyers are entering earlier on each pullback. With the RSI cooling to 45 after overbought readings, XRP has room for renewed momentum without immediately triggering profit-taking.

The Bitcoin Comparison That Changes Everything

Perhaps the most striking validation of XRP’s current momentum comes from direct comparison with Bitcoin’s ETF trajectory. Bitcoin spot ETFs took several months to reach their first billion dollars in cumulative inflows after launching in January 2024. XRP products crossed that threshold in under 50 days, despite launching into a market already saturated with over 40 cryptocurrency ETF products.

The consistency of XRP inflows—zero net outflow days since inception—has no precedent in crypto ETF history. Bitcoin and Ethereum funds experienced frequent redemption waves as traders rotated between assets and took profits. XRP’s unbroken streak suggests institutional mandates are being filled, not retail speculation chasing momentum.

This institutional character explains why XRP has maintained relative stability even as broader crypto markets faced volatility. On December 31, 2025, XRP ETFs recorded $5.58 million in net inflows and the token gained 11% while Bitcoin and Ethereum products suffered massive outflows. The divergence signals that XRP has captured a different investor base—one focused on regulated access to cross-border payment infrastructure rather than purely speculative positioning.

Risks and Reality Checks

Despite the euphoria surrounding XRP’s recent performance, several factors could derail the bullish narrative. The token still trades roughly 45% below its 2025 peak near $3.65, suggesting considerable overhead resistance remains. Historical volatility patterns indicate XRP could test support near $1.25 to $1.77 before establishing a foundation for sustained gains toward higher targets.

Macro conditions also matter enormously. If the Federal Reserve maintains restrictive monetary policy longer than expected, or if broader risk assets face renewed pressure, even strong ETF inflows may prove insufficient to drive XRP sustainably higher. The cryptocurrency market’s correlation with tech stocks and its sensitivity to liquidity conditions remain powerful forces.

Additionally, while current ETF flows are impressive, they represent a small fraction of XRP’s $120+ billion market capitalization. Sustaining the current pace of institutional adoption through year-end would be unprecedented. Any slowdown in flows could quickly reverse momentum as traders who bought into the January rally look to lock in profits.

The Verdict: Breakout or Bull Trap?

XRP’s transformation from regulatory pariah to institutional darling represents one of cryptocurrency’s most dramatic turnarounds. The combination of $1.4 billion in ETF inflows, zero redemption days, 43-day positive flow streak, and 25% January outperformance versus Bitcoin creates a compelling technical and fundamental picture.

For traders and investors, XRP’s current setup offers asymmetric risk-reward if institutional flows continue. The $2.20 support level provides a clear risk management parameter, while potential upside toward $4.00 to $8.00 represents 90% to 280% gains. Whether XRP can maintain its “hottest trade of 2026” status depends on sustaining ETF inflows, avoiding macro shocks, and converting utility narratives into measurable adoption.

What’s certain is that XRP has forced its way back into the conversation. After years in Bitcoin and Ethereum’s shadow, the third-largest cryptocurrency is writing its own chapter—one driven by institutional capital, regulatory clarity, and a supply squeeze that could fuel significant price appreciation if demand holds.