How are you all? I hope everyone is well and that you are having a good time in your daily busy lives. I also spent some time today browsing the crypto market, especially trying to understand what is happening with XRP. Many people were quite excited about the launch of the new ETF, and I also thought that maybe some big moves would be seen this time. But the deeper I went, the more I realised that everything is not that simple.
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After the launch of the Canary XRPC ETF, there was naturally a hope in the market that the price of XRP might rise quickly. Because usually when an ETF comes around, a crypto, it has some impact on it. But this time, that was not seen in the case of XRP. Despite the volume of about $58 million on the first day, the price did not move an inch, but later decreased by 7%. Although it was a little surprising at first, later, when I understood the issues, I saw that ETF works in a completely different mechanism.
The idea that buying an ETF will immediately put pressure on that token market is wrong. Because ETF shares are traded on the stock market, and there the calculations are settled on the T+1 system. This means that the issuer receives the money a day late and then buys XRP when needed. Most of that purchase is done OTC, so it does not have a noticeable impact on the market. Simply put, the launch of an ETF does not mean that the price will increase immediately; it takes time, and sometimes the impact is not seen at all.
On top of that, there is a risk-off mood in the entire crypto market. Investors are less inclined towards risky assets, and that wave has also touched XRP. Despite a lot of good news, coins on which the market has little confidence are not getting a big move for the time being. This is also a big reason why the price of XRP is falling.
Another thing is that no matter how many banking partnerships Ripple has, in reality, not everyone uses XRP. Many of their services run without XRP. Only ODL users need XRP, so it cannot be said that the demand for XRP will always increase if the number of institutions increases. In addition, large holders sell when the price increases a little, which also creates pressure on the market.
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However, ETFs are not bad in the long run. If the inflow continues to grow steadily, then issuers will have to buy XRP, and that space may gradually create a deficit in the future. Then the price may stand on its own. Even if there is no big move right now, the foundation is being laid—that's what I thought.
After analysing all day, I felt that it would not be good to rush into XRP. Everything is very technical, and the market mood is not very favourable right now. It will take time, maybe a lot. But if institutional interest persists, then a visible impact may gradually be seen in the future.
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