The U.S. crypto market witnessed an unexpected shift as spot XRP ETFs experienced their first net daily outflow after 36 consecutive days of influxes. On Wednesday, $40.8 million were withdrawn, reflecting a temporary shift in investor appetite for riskier crypto assets. This move was also observed in the significant outflows from Bitcoin and Ethereum ETFs on the same day. Experts, however, assert that these withdrawals have not altered the longer-term trend.
What Happened with the Spot XRP ETF?
Data from SoSoValue revealed that five spot XRP ETFs in the U.S. had cumulative net outflows of $40.8 million. The most substantial withdrawal was seen in 21Shares’ TOXR fund, which saw $47.25 million exit, contrasting with minor inflows in Canary, Bitwise, and Grayscale funds, amounting to roughly $2 million.
Since November, when Canary’s XRPC product began, XRP ETFs garnered $1.25 billion in net inflows. Wednesday’s outflow was a small portion of this total inflow, with market experts attributing it to profit-taking after XRP’s recent price jump from $1.8 to $2.4.
“Given the sustained demand underscored by low exchange reserves and high transaction volumes, we could witness a resurgence in inflows, testing the $3 mark,” stated Rachael Lucas, a crypto expert from BTC Markets.
Why the Concurrent Bitcoin and Ethereum ETF Outflows?
Simultaneously, Bitcoin and Ethereum ETFs experienced notable outflows. Spot Bitcoin ETFs saw a net withdrawal of $486 million, highlighted by significant exits from Fidelity’s FBTC fund and BlackRock’s IBIT product, amounting to over $700 million in two days.
Ethereum ETFs also faced similar trends, with a $98.5 million net outflow on the same day, largely from Grayscale’s ETHE, which accounted for $52 million. This marked this year’s first net outflow day for Ethereum ETFs, following substantial inflows in the year’s early trading days.
Lucas attributed these shifts to post-valuation adjustments and deleveraging after Bitcoin hit $94,000. Min Jung from Presto Research mentioned a temporary pivot towards equities by investors, reflecting caution in crypto investments.
– XRP ETF outflow accounted for less than 3% of its cumulative inflows, indicating consistent interest.
– Bitcoin ETFs lost $486 million, with key exits from Fidelity and BlackRock funds.
– Ethereum ETF outflows were largely observed in Grayscale’s ETHE fund.
This activity underscores a period of recalibration in crypto investments, although analysts believe that investor interest remains resilient and capable of rebounding in the near future.
