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Is Ripple’s institutional cycle just getting started?
Yes, potentially, for major Layer-1 networks ahead of the upcoming CLARITY Act vote. Its passage would result in the significant institutional adoption wave as more TradFi players would feel confident about migrating their financial activity on-chain. But can we say that $XRP is at the center of it all?
Well, technically, the 32% rally so far on $XRP’s price in the current Q3 cycle is the best quarterly performance since the post-election rally in Q4 2024. This saw $XRP climb by over 240%, making it one of the best large-cap assets in terms of performance. The key takeaway? It showed how responsive $XRP was to the changing regulatory environment, which grew much more crypto-friendly.
Naturally, the question becomes: Is Ripple [$XRP] set for a repeat cycle ahead of the CLARITY Act?
Assessing the current institutional flows, this possibility cannot be ruled out. In particular, as per SoSoValue, $XRP spot ETFs have registered more than $215 million in net inflows so far in Q3, adding to the $270+ million seen in Q2.
More importantly, $XRP’s weekly spot ETF inflows reached $18 million, while Bitcoin saw around $400 million in outflows. This divergence suggests that institutional capital could already be starting to rotate toward altcoins ahead of the CLARITY Act vote.
However, when $XRP’s on-chain activity, technical strength, and September strategy are factored in, these inflows may look less like a broad altcoin rotation and more like “$XRP-specific” demand. This divergence, in the view of AMBCrypto, could strengthen the case for another 2024-style $XRP rally, with institutional flows potentially becoming a key driver for its next cycle.
$XRP’s strong setup faces a key CLARITY Act test
The whole idea behind the act boils down to one critical element – Liquidity.
The rationale is rather simple: The more liquidity a Layer-1 network offers on-chain, the easier it is for capital to flow through it, facilitate DeFi applications, and power actual financial use-cases on the blockchain. In this regard, the chart below begins to hold additional weight.
According to DeFiLlama, the total market cap of XRPL’s stablecoins has increased more than 2% this week. This means over $22 million in fresh liquidity entering the network. The critical detail here is that over 91% of this liquidity is derived from its own $RLUSD stablecoin. T
he data reveals that $RLUSD’s supply is now at a new all-time high of $2.442 billion this week, which makes the case for increased capitalization of XRPL and its usage within institutional finance even stronger.
The timing is key.
As the CLARITY Act approaches, the deeper XRPL liquidity would create a significant tailwind for institutions considering adoption of the asset on the back of a clear regulatory path.
That makes the idea of $XRP’s central role in the TradFi-DeFi transition much harder to ignore. So, if these catalysts come together, the $XRP could be setting up for yet another 2024-style parabolic cycle.
Final Summary
- $XRP is gaining momentum with strong ETF inflows and rising XRPL liquidity.
- CLARITY Act approval could boost adoption. In turn, putting $XRP at the center of the next institutional cycle.