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XRP price would hit a level it last witnessed six years ago if an XRP ETF product scoops up about 50% of total Bitcoin ETF inflows following approval.
The projected launch of an XRP ETF product has dominated the discussions within the XRP community. This is largely due to the potential such a product has in terms of bolstering XRP price action.
An XRP ETF Could Inject More Capital
Notably, an exchange-traded fund (ETF) is capable of attracting more capital into the XRP market, especially from institutional investors. The market observed this trend with Bitcoin, which has so far observed an inflow of over $17 billion in capital since the launch of its ETF products.
As a result, BTC broke an age-old historical trend to secure a new all-time high before its halving in this cycle. Though inflows have cooled since the first quarter of the year, the spot Bitcoin ETF products remain in the green.
Meanwhile, amid the success of the spot Bitcoin ETF products, discussions around the potential launch of ETFs tied to other crypto assets emerged. Ethereum, the second-largest cryptocurrency, was second to witness these products, but they have not been as successful as the Bitcoin vehicles.
Interestingly, members of the XRP community believe XRP is the next asset in line to see a spot ETF launch, given its legal clarity. Recall that in May, Ripple CEO Brad Garlinghouse argued that the launch of ETFs tied to XRP, Solana and Cardano could be imminent.
Notably, asset manager Grayscale Investments recently re-introduced its XRP Trust. This move was the first of four steps in the introduction of an XRP ETF. As a result, the speculations surrounding the potential launch of an XRP ETF have gained steam in recent times.
XRP Price if XRP ETF Gets 50% of BTC ETF Inflows
Should Grayscale move forward with launching an XRP ETF, other asset managers could follow. This trend materialized with the Bitcoin and Ethereum ETFs. Further, the success of these products could benefit XRP price tremendously if they record a success similar to the Bitcoin ones.
For instance, the Bitcoin ETFs now boast a cumulative net inflow of $17.698 billion since their launch in January. If the XRP ETFs witness 50% of this inflow, they could attract up to $8.849 billion in capital injection into the market.
Applying an inflow-to-valuation multiplier of 1:10 would translate to an additional $88.49 billion for XRP’s market cap. Notably, XRP currently has a market valuation of $33.237 billion at the reporting time. If the market welcomes $88.49 billion more, XRP’s valuation would surge to $121.73 billion.
Given XRP’s circulating supply of about 56.5 billion tokens, a market cap of $121.73 billion leads to a price of $2.15. This value is a 265% increase from the current XRP price of $0.5890. The last time XRP saw the $2 price level was in January 2018 amid its drop from the $3.31 all-time high.