The debut of Canary Capital’s XRP exchange-traded fund (ETF) arrived with expectations that extended far beyond the initial trading day. Many investors anticipated an immediate price rise, yet the market delivered a different outcome.
While the product received notable attention, XRP’s price did not follow the pattern some observers predicted. Instead, the asset declined in value. This prompted a closer look at how ETF structures interact with the underlying cryptocurrency.
Market Structure and ETF Mechanics
A key point raised by Fabio Marzella, co-founder and manager of XAO DAO, concerns how ETF transactions work. He explained that ETF trading takes place on traditional stock exchanges, not on cryptocurrency platforms.
According to Fabio, this means that an XRP ETF purchase does not instantly cause a purchase of XRP. He attributed this to the T+1 settlement system, noting that the ETF provider receives the funds the next business day and can only begin acquiring XRP after that.
Why, Why is XRP down after the launch of the first ETF!
In my opinion, many people thought XRP would shoot up right away but it didn’t, and there’s a straightforward reason.
ETF trading happens on the stock market, not on crypto exchanges. So when someone buys an XRP ETF, it…
— FMXRP – Fabio Marzella – XAO DAO (@FMXRP1) November 16, 2025
His comment that an ETF “doesn’t pump the price right away” reflects this functional delay. This detail matters because expectations surrounding cryptocurrency ETFs often draw from how spot market buying might influence liquidity and pricing.
While the ETF provider will purchase a lot of XRP as the product grows, the settlement delay creates a separation between investor activity and the pace at which ETF issuers adjust their holdings. As a result, XRP continues to move within the existing market environment before ETF-related demand reaches the underlying asset.
Market Conditions at the Time of Launch
The period surrounding the ETF’s introduction also featured a downturn across digital assets. Bitcoin fell, several major altcoins moved lower, and XRP declined alongside them. Market-wide shifts typically influence assets with high liquidity and significant supply, and XRP fits that category.
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Marzella noted that XRP’s supply structure means that activity from large holders can offset upward pressure during uncertain trading conditions. This combination of broad market weakness and structural characteristics contributed to the short-term decline despite the excitement from the ETF launch.
Expectations for ETF-Driven Demand
Marzella argued that the potential influence of the ETF should be viewed through a longer lens. While ETFs can bring massive growth, he noted that the effect becomes visible once the ETF provider begins acquiring XRP to support fund operations.
The adjustment process can take time, and the market does not always show immediate changes in the early stages. His view calls for patience as ETF-related inflows grow.