Why XRP’s ETF Rollout Looks Nothing Like Bitcoin’s

Instead of relying on a rising market or a familiar cycle narrative, XRP-linked funds are attracting capital under far less supportive conditions – and that, according to issuers, is precisely what makes them unusual.

In most cases, crypto ETFs flourish when sentiment is already strong. That was certainly true for Bitcoin, whose ETF approval unlocked years of pent-up institutional demand during a favorable market backdrop. Ethereum followed a different, slower path, with early flows muted before interest gradually built.

XRP’s experience does not line up with either precedent. Despite a broadly weaker crypto market, XRP ETFs have already pulled in around $1.12 billion in assets. For fund managers, the significance lies not in competing with Bitcoin’s historic debut, but in the timing. Capital is arriving when risk appetite across crypto is fading, not expanding.

That contrast is reshaping how XRP is being discussed inside institutional allocation conversations.

Why Asset Managers See a “Third Model”

According to Matt Hougan, XRP ETFs are following what he describes as a distinct third model. Instead of feeding off speculative momentum, these products appear to be gaining traction based on perceived utility, diversification value, and long-term infrastructure relevance.

Hougan has noted that reaching the billion-dollar mark in a soft market environment is rare. In his view, the same level of demand during a strong crypto cycle would likely have translated into far larger inflows, suggesting that current allocations are not purely sentiment-driven.

Early Signals From Institutional Conversations

For Steven McClurg, XRP’s strength was visible well before the ETFs officially launched. He said investor discussions indicated a level of interest that did not depend on broader market enthusiasm.

McClurg contrasted this with Ethereum’s ETF rollout, where competition among issuers was intense and differentiation was limited. In that environment, launching a product carried less appeal. XRP, by comparison, entered the ETF space with fewer direct substitutes, giving institutions a cleaner way to gain exposure to an asset they felt was underrepresented.

Not a Bitcoin Clone – And That May Be the Point

Bitcoin’s ETF success was built on its role as crypto’s benchmark asset and its well-known four-year cycle. XRP does not share that profile, and asset managers increasingly view this as an advantage rather than a drawback.

Instead of behaving like a levered bet on Bitcoin’s cycle, XRP is being framed as a divergent allocation. Its investment case is more closely tied to payment infrastructure, cross-border settlement narratives, and regulatory progress than to halving-driven scarcity dynamics.

For portfolio managers, that distinction matters. XRP offers exposure that may not move in lockstep with Bitcoin, potentially improving diversification rather than amplifying existing risk.

What the Early Flows Really Indicate

No one involved expects XRP ETFs to rival Bitcoin in absolute scale. Even the most optimistic issuers acknowledge that Bitcoin’s ETF launch was a once-in-a-generation event. But the willingness of institutions to commit capital to XRP during a down market suggests something more structural than opportunistic trading.

Rather than chasing momentum, investors appear to be testing XRP as a longer-term allocation – one that can sit alongside Bitcoin and Ethereum without simply mirroring their behavior.

If this pattern continues, XRP’s ETF story may end up being quieter but more resilient. Instead of depending on market euphoria, it could establish itself as a steady, infrastructure-linked exposure within institutional portfolios – following neither the Bitcoin playbook nor Ethereum’s slower burn, but something entirely its own.



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