Recent days have seen investor attention drawn to forecasts about potential XRP price increases due to the emergence of new exchange-traded funds (ETFs). Analysts believe such changes could significantly influence the market.
Capital Influx Scenario
According to Rob Cunningham, if 17 new ETFs purchase $1 billion each over the course of a year, this would create a demand of $17 billion. The starting price of XRP is $3, and given only 5 billion tokens in circulation, sharp price increases cannot be ruled out.
Price Discovery Mechanics
At a price of $3 per XRP, $17 billion could purchase around 5.67 billion tokens, already exceeding the available float. This implies an inevitable price increase. However, real markets are more complex as sellers can be price-sensitive, and large orders may complicate execution.
Impact of Institutional Demand
Cunningham also highlights that ETFs can create a benchmark for banks and retail investors. Even a minor allocation from their capital pools could exceed ETF volumes. Thus, demand for XRP could lead to notable price increases.
The introduction of new ETFs into the XRP market could lead to significant changes in price dynamics, creating conditions for broader institutional participation and potential price hikes.
