XRP available at large stock exchanges has fallen dramatically in recent months. Coinbase, an important preservator, only has around 100 million XRP, a decrease of almost 90% compared to previous levels. This Sharp Drop sets the stage For a supply squeeze, as institutions that prepare for spot ETFs accumulate tokens.
Institutional movements create market trimps
Large companies that apply for an XRP spot -started to buy strategically via Twap and VWAP. Each purchase reduces circulating delivery because ETF shares are supported by the actual XRP that is kept in custody with providers such as Coinbase or Anchorage. With some ETFs that represent between 5 and 50 XRP per share, this inflow is expected to become a noticeable effect on the market.
Regulatory changes Fuel confidence
Paul Atkins, the new SEC chairman, is considered crypto-friendly. Under his leadership, the SEC offers clearer guidance instead of maintaining strict regulations. In combination with the support of the CFTC, this could accelerate the ETF approvals compared to the past. The SEC currently requires six months Futures market trade before approving a spot ETF, but future rules can make faster approvals possible based on market volume and total activa capitalization.
Historical precedent: Bitcoin and Ethereum
Past ETF launches insight for Bitcoin and Ethereum. In both cases, the institutional demand by ETFs caused price movements and reduced available supply. XRP could see similar dynamics, especially with a tight exchange inventory.
Market watch: a “supply shock” in motion
The combination of shrinking XRP inventory and institutional accumulation is to create a de facto delivery shock. Jake Claver said that any approved ETF could lock more XRP in custody, reducing circulation and the market pressure is strengthened. Experts follow closely archive and guardianship flows as indicators for potential market shifts.