XRP ETP capital inflow of 70 million! Bitcoin outflow of 443 million, market divergence

According to CoinShares data, the cryptocurrency ETP market has entered a second consecutive week of bear market, with total outflows reaching $446 million. Bitcoin ETPs led the decline, losing nearly $443 million, while Ethereum products saw outflows of $59 million. However, XRP funds defied the trend, attracting $70 million in inflows, with Franklin Templeton’s XRP ETF alone seeing a weekly inflow of $28.6 million.

Bitcoin Loses $443 Million, XRP Becomes a Safe Haven

Last week, the capital flows in the crypto ETP market showed extreme divergence. Bitcoin ETPs led the decline, with nearly $443 million evaporating, marking a reversal after three consecutive weeks of inflows. Ethereum products also lost $59 million, indicating that mainstream crypto assets are facing a crisis of investor confidence. This large-scale outflow reflects concerns among investors about Bitcoin’s price dropping from its October all-time high of $126,080 to the current range of around $87,000.

In contrast, XRP funds performed remarkably well. The $70 million weekly inflow stood out amid the overall outflow of $446 million, indicating that investors are actively reallocating assets from Bitcoin and Ethereum into XRP. This capital rotation is not random but based on rational judgments of XRP’s improving fundamentals, including legislative progress on market structure bills, the nearing conclusion of Ripple’s lawsuit with the SEC, and the ongoing expansion of cross-border payment applications.

Franklin Templeton launched its XRP ETF in late November, with a weekly inflow of $28.6 million, accounting for about 41% of total XRP inflows. As a traditional asset management giant, its launch of an XRP ETF is a significant endorsement of the asset. Although the ETF is relatively new, it has quickly attracted institutional capital, indicating growing interest from traditional finance (TradFi) investors in XRP.

While Solana also saw inflows of $7.5 million, the scale is much smaller than XRP. These two are the only bright spots in the market, reflecting that investors are seeking assets with clear use cases and regulatory clarity. In contrast, altcoins lacking clear utility or with ambiguous regulatory status are less favored by institutional investors in the current environment.

$3.2 Billion Outflows and Investor Confidence Still Not Fully Restored

CoinShares notes that since the market shock on October 10, total outflows from crypto ETP products have reached $3.2 billion. This market shock was partly triggered by US President Trump’s threat to impose 100% tariffs on Chinese imports, leading to the largest liquidation event in the crypto market, involving even large institutional investors and market makers.

This continued outflow indicates that investor sentiment has not fully recovered. However, CoinShares also points out that year-to-date inflows are roughly on par with last year, totaling $46.3 billion, with $48.7 billion in 2024. The total assets under management (AUM) have only grown by 10% since the start of the year, implying that, despite inflows, the average investor has not seen significant returns this year.

This data reveals a harsh reality: although $46.3 billion in new capital has entered, AUM has only increased by 10%, meaning that the price appreciation of crypto assets has not been enough to cover the expected inflows. Simple calculation shows that if AUM was X at the start of the year, after inflows of $46.3 billion, it should be X + 46.3 billion, but in reality, it only grew by 10%, indicating significant volatility and retracement in asset prices that eroded most of the value of the inflows.

Comparing the $48.7 billion inflow in 2024 with the $46.3 billion in 2025, the absolute numbers are slightly lower, but considering that 2025 experienced more regulatory uncertainty and market volatility, this inflow scale still indicates that institutional interest in crypto remains intact. The key question is how these funds are allocated across different assets, and XRP’s contrarian inflows exemplify this structural shift.

Comparison of Capital Flows: US vs. Germany

US Market Dominates Outflows: Since all the largest Bitcoin and Ethereum ETPs are listed in the US, the US market saw outflows of up to $460 million, accounting for the majority of global outflows.

Switzerland’s Simultaneous Withdrawals: Switzerland ranks second, with outflows of $14 million, indicating that Europe’s traditional crypto financial hub is also reducing holdings.

Germany’s Contrarian Buying: Germany is a clear exception, attracting $35.7 million in inflows, with total inflows reaching $248 million, showing that German investors are accumulating positions during price weakness.

Franklin Templeton XRP ETF’s Demonstrative Effect

Franklin Templeton’s XRP ETF attracted $28.6 million in inflows within just a few weeks of launch, a remarkable achievement in the current market environment. Franklin Templeton manages over $1.5 trillion in assets and is one of the world’s largest asset managers. Its decision to launch an XRP ETF rather than other altcoin products is itself a strong endorsement of XRP’s quality.

This participation of a traditional finance giant brings multiple benefits to XRP. First, Franklin Templeton’s reputation provides a regulatory endorsement, alleviating some institutional concerns about regulatory risks. Second, its extensive client network and sales channels can promote XRP exposure to traditional investors who previously paid little attention to crypto. Third, the timing of the ETF’s launch coincides with XRP’s lawsuit with the SEC nearing resolution, which enhances regulatory clarity and product attractiveness.

In contrast, Bitcoin and Ethereum ETFs, though larger in scale, have been hit hardest during market adjustments. Investors in these products tend to view crypto assets as high-risk allocations, and market volatility often prompts them to reduce holdings. XRP ETF investors may be more focused on its cross-border payment applications and regulatory breakthroughs, making their allocations more resilient based on fundamentals.

XRP and Solana are the only two assets experiencing capital inflows, reflecting a shift in investor preferences. In an environment of rising uncertainty, investors favor assets with clear use cases, technological progress, and regulatory clarity. XRP’s partnerships in cross-border payments, Ripple’s enterprise solutions, and Solana’s strengths in DeFi and NFTs all underpin its ability to stand out amid capital rotation.

Lessons from German Investors’ Bottom-Fishing Strategy

Amid the global outflow of crypto ETP funds, Germany’s performance is particularly notable. CoinShares data shows Germany attracted $35.7 million in inflows, with total inflows reaching $248 million. CoinShares analysts suggest: “German investors are taking advantage of recent price weakness to accumulate positions.”

This contrarian strategy warrants in-depth analysis. As Europe’s largest economy, Germany’s institutional investors are known for rational and long-term perspectives. When the US market panics and sells off, German investors choose to buy the dip. Several factors may explain this behavior. First, Germany’s regulatory environment for crypto is relatively clear, with MiCA (Markets in Crypto-Assets Regulation) providing a transparent compliance framework. Second, German investors may be more calm about US political risks (such as Trump’s tariffs), viewing them as short-term disturbances rather than long-term trends.

With US outflows reaching $460 million, accounting for most of the global outflows, the concentration of US-listed Bitcoin and Ethereum ETPs means US market sentiment heavily influences the global crypto ETP market. Switzerland’s $14 million outflow indicates that Europe’s traditional crypto financial centers are also reducing holdings.

From the perspective of XRP, Germany’s proactive stance may signal rising European institutional interest in XRP. If Germany’s bottom-fishing proves correct by 2026, it could attract more European institutions, providing new funding sources for XRP. For global investors, Germany’s contrarian approach offers a valuable lesson: staying calm during panic and accumulating quality assets during price weakness may be key to navigating cycles.