Evernorth Faces $225 Million Loss Due to XRP Decline – Here’s What Occurred

Since Ripple's XRP dropped below the $2 mark, it has remained below this critical level for over a week, indicating consistent downward pressure. This bearish trend has caused substantial losses, particularly for treasury firms that hold large amounts of XRP.

Key Takeaways

Evernorth has incurred a significant unrealized loss of $225 million due to the decline in XRP's price.
The company initially purchased 388.7 million XRP tokens worth approximately $947.1 million.
Despite Evernorth's losses, XRP Spot ETFs have continued to see inflows, suggesting strong institutional interest.
XRP is facing heavy selling pressure, resulting in a fragile market condition.

Evernorth's $71 Million Profit Turns to $225 Million Unrealized Loss

Evernorth's Significant Unrealized Loss

From October 22 to December 24, Evernorth acquired 388.7 million XRP tokens valued at about $947.1 million, making it the largest publicly traded entity focused solely on XRP. However, during the general decline in the cryptocurrency market, XRP’s price fell from $2.60 to $1.80.

Evernorth XRP Holdings Source: CryptoQuant

This price drop has transformed Evernorth's holdings from a $71 million unrealized profit into a staggering $225 million loss, as reported by analyst Maartunn. These substantial paper losses highlight the weak market conditions and increase the chance of capitulation among holders. While long-term investors like Evernorth may hold their positions in anticipation of a recovery, there is a risk that less committed investors may panic and sell.

Spot ETFs Persist in Accumulation

Interestingly, even with Evernorth's significant losses, XRP Spot ETFs have continued to show strong accumulation. Since their introduction over a month ago, these ETFs have experienced net inflows consistently, boosting their total net assets to $1.25 billion as of this writing.

Spot XRP ETFs Source: Sosovalue

This contrast between increasing losses for Evernorth and the continued inflows into ETFs indicates robust institutional demand for XRP, despite current market conditions. Larger entities still perceive a favorable long-term outlook for XRP and anticipate a potential turning point soon.

Understanding XRP's Weakness

Despite ongoing institutional interest, XRP has been under severe selling pressure from both small investors and whale holders, making ETF demand insufficient to counterbalance the decline. Consequently, Capital Flow Strength has shown significantly more outflows than inflows, with both metrics remaining negative since late November—recording -42 and -14 at the time of writing.

XRP Capital Flow Strength Source: TradingView

The increasing outflows have intensified bearish pressure. Additionally, the Accumulation/Distribution Money Flow (ADMF) remains negative, indicating that sellers currently dominate the market. As a result, most market participants are inclined to sell, and the lack of strong institutional demand has left XRP's structure weak and susceptible to further declines. Continuing this trend, XRP could potentially drop towards $1.50. For a reversal to occur, buyers, particularly large institutional investors, would need to push XRP back above $2 and establish this level as support.

Conclusion

In summary, Evernorth's significant unrealized loss reflects broader market struggles for XRP, even as institutional demand remains persistent through ETF inflows. To navigate the current bearish environment, the market will need a boost from buyers to change the trajectory of XRP.