Other headwinds for XRP through the third quarter included US-China trade tensions, the MSCI consultation on the listing of digital asset treasury companies (DATs), and falling bets on a Fed rate cut.
In the fourth quarter, markets have revived bets on a December Fed rate cut, and US-China trade tensions have subsided. However, XRP remains in negative territory as two key price drivers weigh on demand. XRP-spot ETFs have seen modest inflows despite expectations of pent-up demand translating into record inflows in the first month of trading. XRP-spot ETF issuers have reported $643.92 million in net inflows since launch.
BlackRock’s (BLK) absence from the ETF market has been telling, given Canary XRP ETF’s (XRPC) top ranking, with net inflows of $334.59 million. For context, BTC-spot ETFs saw $858.3 million in net inflows during the first two days of trading despite Grayscale Bitcoin Trust bleeding over $500 million.
The iShares Bitcoin Trust (IBIT) has reported net inflows of $62.68 billion since launch, while GBTC has seen $25.02 billion in outflows. A BlackRock absence from the BTC-spot ETF market would likely have led to net outflows rather than total net inflows of $57.64 billion.
XRP-spot ETFs face near-term uncertainty, given the broader crypto market’s fourth-quarter sell-off. Institutional investors may also view BlackRock’s decision to delay an iShares XRP Trust as a sign of no confidence in the longer-term prospects for XRP-spot ETFs.
While ETF flows disappoint, the MSCI’s consultation paper questioning the listing of DATs on indices remains another headwind. Hopes that blue-chip companies will build XRP holdings for treasury reserve purposes contributed to XRP’s June-July breakout to new highs. However, listed companies will likely delay plans to hold the token as a treasury reserve asset until January.
The MSCI will decide on whether to delist DATs on January 15, 2026, a potentially make-or break decision, given supply-demand dynamics. XRP plunged to a low of $0.7773 in response to the consultation paper before reclaiming the $2.6 handle. Traders have remained cautious since, with XRP briefly dropping below the $2.0 psychological support level before it steadied.
The downside risks from the MSCI delisting DATs and weak demand for XRP-spot ETFs support the bearish near-term outlook. In my opinion, XRP could fall back toward the November low of $1.8239. Losses would likely be heavier if lawmakers block the Market Structure bill and the OCC rejects Ripple’s application for a US-chartered banking license.
US legislative developments will likely have a greater impact on XRP price trends than the OCC’s banking-license decision. The Senate is likely to pass the Market Structure bill, unlocking the crypto door for a broader investor base. A crypto-friendly regulatory landscape would benefit spot ETFs and XRP. Demand may then outstrip supply, supporting a bullish medium to longer-term outlook.
In my opinion, protecting the downside beyond the November low of $1.8239 is key for long positions, given the risk of an extended drop to $1.5.
Upside risks included a surge in demand for XRP-spot ETFs, BlackRock launching an iShares XRP Trust, MSCI retaining DATs, and the Senate passing the Market Structure Bill. These events would set up a perfect storm for XRP.
Given XRP’s reaction to the House passing the Market Structure Bill in July, a breakout above the $3.66 ATH is likely. So to recap, short-term bearish but bullish over the medium to longer-term.
XRP declined 0.84% on Friday, November 28, following the previous day’s 1.03% loss, closing at $2.1816. The token underperformed the broader market, which fell 0.45%.
Friday’s pullback left XRP trading below the 50-day and 200-day Exponential Moving Averages (EMAs), reaffirming a bearish bias.
