ETF Trading Mechanics Explain XRP's Price Stagnation
The XRP community is actively discussing the reasons behind XRP's price failure to rally following the launch of the highly anticipated Canary Capital XRP ETF (XRPC). Despite the fund achieving one of the strongest ETF debuts of 2025 with $245 million in day-one inflows, XRP's price has continued to trend downwards.
Fabio Marzella, Founding and Board Director of the XRPL Foundation, has stepped in to provide an explanation for the observed market behavior.
Understanding ETF Settlement and Market Dynamics
Marzella clarified in a post on X that many individuals anticipated an immediate price surge upon the commencement of XRPC trading. However, the structure of ETF settlement explains why this did not occur as expected.
He explained that ETF trades are executed on the stock market, distinct from cryptocurrency exchanges where spot XRP is traded. Due to the T+1 settlement system, when an XRP ETF share is purchased, the issuer does not receive the cash immediately. The funds are settled on the next business day. Only after this settlement can the fund provider begin acquiring the necessary XRP to back the fund.
This inherent delay means that early inflows do not directly translate into immediate demand in the spot market. Marzella emphasized that an ETF does not inherently boost prices on its launch day. The significant impact often manifests later, sometimes gradually before becoming more pronounced.
Strong Debut Metrics Contrast with Weak Price Performance
Following its debut, the XRPC ETF recorded $26 million in trading volume within its first 30 minutes and $58.5 million by the market close. Furthermore, the fund logged $245 million in net inflows on its inaugural day.
These figures positioned XRPC as the top ETF debut of the year, outperforming even the Bitwise Solana ETF. The XRP fund also ranked among the best-performing ETF launches out of over 900 issued in 2025.
Despite this strong initial momentum, XRP experienced a price decline, falling from $2.52 to approximately $2.28. Since the ETF's launch, XRP's price has decreased to $2.16 before a slight recovery to $2.25 at the time of reporting. This represents an 8.63% decrease over the past week.
Bearish Market Conditions Impacting XRP
Marzella also identified a second contributing factor to XRP's price decline: the prevailing bearish sentiment across the entire cryptocurrency market.
Bitcoin recently fell below the $100,000 support level and has since traded around $92,900. This downturn in Bitcoin's performance has negatively affected the broader market, with major altcoins, including XRP, following the trend.
Nick from The Web Alert highlighted that even inflows amounting to tens or hundreds of millions of dollars are insufficient to counteract significant market selling pressure, particularly given XRP's substantial supply. Any substantial selling activity from major holders can easily offset upward price movements.
Over-the-Counter Purchases May Obscure Real Buying Activity
Another reason for the delayed price impact is the method by which ETFs acquire their underlying assets. Even after settlement, issuers typically do not purchase assets directly from public exchanges. Large funds like Canary Capital frequently source their assets from over-the-counter liquidity providers. This means that these purchases are not reflected on public spot price charts.
Marzella concluded his explanation by advising patience. The price effects driven by ETFs often lag behind the initial launch-day excitement. This was observed with Bitcoin's own ETF debut in January 2024, which initially showed minimal price reaction before triggering a significant rally weeks later.