XRP ETFs Experience $41M in Outflows — What’s Behind It?

This week, U.S. spot XRP exchange-traded funds (ETFs) experienced their first net outflows since their launch, ending a 36-day streak of continuous inflows. With $40.8 million in funds leaving the ETFs, questions arise about the timing of these outflows rather than any long-term demand concerns.

Key Takeaways

U.S. XRP ETFs saw their first-ever net outflows, totaling $40.8 million.
The bulk of the outflow came from the 21Shares XRP ETF, which lost $47.25 million in one day.
Other XRP ETFs managed to stay stable or even attract small inflows.
Despite this single-day outflow, XRP ETFs have still attracted about $1.20 billion in cumulative net inflows since their launch.
Broader market conditions, including a 6.4% drop in XRP's price, influenced these outflows, alongside similar losses in Bitcoin and Ethereum ETFs.
On-chain data indicates that large XRP transactions are occurring, suggesting significant interest amid the market activity.

XRP ETFs Record $41M in Outflows — What’s Next?

Main Content

This week marked a pivotal moment for U.S. spot XRP exchange-traded funds as they reported net outflows for the first time since their inception, concluding a 36-day period of uninterrupted inflows. According to data from SoSoValue, the five listed XRP ETFs recorded an aggregate net outflow of $40.8 million on January 7, representing the first such decline since trading commenced in mid-November.

One ETF Leads the Outflows

The significant decline was primarily attributed to one ETF: the 21Shares XRP ETF, known by its ticker TOXR. This fund alone saw $47.25 million exit in just one day, which is approximately 21.66 million XRP. As a result, TOXR’s cumulative net flows turned negative, now sitting at minus $8.18 million, even though it still maintains nearly $258 million in net assets.

Other XRP-related ETFs performed differently during the same period. Canary's XRPC, Bitwise's XRP fund, and Grayscale's GXRP each experienced modest inflows of approximately $2 million, while Franklin's XRPZ remained unchanged throughout the day.

Even with this notable outflow, the overall situation since their launch remains positive. XRP ETFs have drawn in roughly $1.20 billion in cumulative net inflows and currently hold around $1.53 billion in total net assets, amounting to about 1.16% of XRP's total market value. The trading activity for these products reached $33.74 million that day, which aligns with recent averages.

Broader Market Conditions at Play

The timing of the outflows appears to align with wider market trends rather than being specific to XRP. Over the last 24 hours, XRP's price dropped about 6.4% to approximately $2.10, retreating from a recent peak of around $2.25. This price change coincided with a more than 30% decline in trading volume, which fell to $4.14 billion, indicating decreased short-term trading activity rather than panic selling.

Moreover, XRP ETFs weren't the only ones affected; Bitcoin and Ethereum ETFs also reported substantial outflows on the same day. Spot Bitcoin funds saw $486 million depart, extending a two-day drawdown that now exceeds $700 million. Ethereum ETFs encountered their first net outflow day of 2026, with a loss of $98.5 million after starting the year with strong inflows. The synchronized nature of these movements suggests that portfolio rebalancing is occurring rather than a complete loss of faith in XRP products.

Seasonal Trends and On-Chain Metrics

The ETF flow structure is important to consider, as November and December were the peak months for growth, seeing nearly $1.17 billion added during that timeframe. In January, although inflows have slowed, they remain positive overall. As of the week ending January 7, XRP ETFs had still gained a net addition of $24.4 million, even after this week's withdrawals.

On-chain metrics also provide valuable insights. Data from CryptoQuant suggests that significant XRP movements to Binance have decreased gradually since a peak in mid-December. Although large investors (or "whales") continue to make up most exchange activity, their proportion has dipped from over 70% late last year to about 60%.

In contrast, retail investor activity seems stable, showing no indications of mass selling. Furthermore, data from Santiment indicates a notable uptick in large XRP transactions, with transfers exceeding $100,000 reaching a three-month high earlier this week. This suggests increased market positioning rather than a clear directional shift in strategy.

Conclusion

All these indicators point to a market currently digesting gains rather than experiencing a downward trend. XRP has remained up over 13% within the past week and almost 10% year-over-year. The recent ETF outflows likely reflect short-term profit-taking and general portfolio adjustments, rather than a fundamental shift in market demand for XRP.