XRP ETFs Could Drain Up to 6% of Supply as Institutions Step In, Signaling a Bitcoin-Style Shift Grayscale’s Head of Research, Zach Pandl, has flagged a development in XRP that could meaningf
Grayscale’s Head of Research, Zach Pandl, has flagged a development in XRP that could meaningfully shift how the market views its supply dynamics and long-term price structure.
Speaking on The XRP Pod, Pandl noted that if XRP spot ETFs follow in the adoption footsteps of Bitcoin and Ethereum, they could ultimately absorb around 5–6% of the circulating supply.
Importantly, this isn’t about valuation, it refers to real XRP being purchased and held in ETF custody, effectively removed from active market circulation.
Each time investors buy ETF shares, issuers must acquire and hold the underlying XRP to back them. These coins are then stored with custodians, reducing the amount freely available on exchanges. As inflows grow, so does the locked supply.
Bitcoin and Ethereum have already seen this play out since their spot ETF approvals, with steady institutional inflows steadily shifting large portions of supply into long-term custody. Pandl suggests XRP could be entering the same structural phase.
The scale is where it becomes significant because wiith XRP’s large circulating supply, a 5–6% reduction in liquid tokens translates into billions of XRP taken off the open market. This kind of tightening can matter in moments of rising demand, where even moderate inflows can trigger sharper price moves due to thinner liquidity.
Realistically, XRP ETFs are increasingly being viewed as more than just another investment wrapper. They act as a gateway for pensions, asset managers, and RIAs to gain exposure without directly holding the asset, creating a steady institutional bid that behaves very differently from retail-driven cycles.
Early signals are beginning to support this view since institutional interest in XRP-linked products has been skyrocketing with weekly inflows recently hitting a 2026 high.
On the other hand, investment banking giant Morgan Stanley disclosed exposure to XRP-focused exchange-traded funds in its latest 13F filing with the U.S. SEC, including positions in the Volatility Shares XRP ETF and Grayscale’s GXRP.
Therefore, the projection and early positioning point to a familiar institutional pattern: gradual absorption of supply into regulated financial products.
If this trajectory continues, the central question for XRP may shift, from whether demand grows, to how much tradable supply is left once large-scale institutional buying fully ramps in.
