BTC ETF continues to outflow, XRP ETF defies the trend with a net inflow of $42 million over the week

The global cryptocurrency asset market exhibited highly divergent capital flow data in late May 2026: Bitcoin and Ethereum ETFs continued their outflow trend, while XRP-related ETF products recorded sustained positive net inflows. Meanwhile, the XRP ledger added over 4,300 new wallets within a single day, marking the fourth-largest network growth peak of 2026.

This phenomenon of "mainstream narrative under pressure, specific assets strengthening" needs to be understood within a broader macro market sentiment, regulatory evolution, and institutional allocation logic.

Does Bitcoin ETF Outflow Indicate Capital Exiting the Cryptocurrency Market

During the week of May 18–22, 2026, the US spot Bitcoin ETF experienced approximately $1.26B in net outflows, setting one of the largest single-week withdrawals since the product's launch. Ethereum ETFs were similarly pressured, with about $65 million in funds withdrawn during the same period.

However, narrowing the observation scope to XRP-related products reveals a completely different picture. As of May 25, 2026, according to Gate market data, XRP prices in late May mainly ranged between $1.28 and $1.45. Meanwhile, since April 30, XRP ETFs have not experienced single-day net outflows. Over the week, XRP ETF saw a total net inflow of about $42 million.

The large redemption of Bitcoin ETFs cannot simply be equated with a "general de-risking of the crypto market." A more reasonable interpretation is that some institutional funds are taking profits or reducing risk exposure from Bitcoin positions, while reallocating part of their holdings into competitively narrative-driven assets. The six consecutive trading days of net outflows from Bitcoin ETFs have compressed the total net inflow since 2026 to about $536 million, approaching the threshold of a full-year net outflow. Funds have not completely exited the crypto asset class but are in a phase of "structural reallocation."

Can 4,300 New Wallets in a Single Day Be Considered a Valid Network Growth Signal

On-chain data provides another layer of validation for the above capital flow judgments. According to Santiment, on May 20, 2026, the XRP ledger added 4,300 new wallets within 24 hours, marking the fourth-largest single-day network growth peak of the year. During the same period, daily active addresses increased from about 32,000 to 43,520.

In on-chain analysis frameworks, the number of new wallets is generally regarded as a fundamental indicator of network "adoption of new users," and the simultaneous rise in active addresses indicates these wallets are not "ghost accounts" but are actively participating in asset sending, receiving, and interaction. It should be noted that the overall growth rate of the XRP network has been declining since the end of 2025; this 4,300-wallet increase is more of a "pulse-like uplift" rather than a trend reversal.

Nevertheless, the combined signals from two time dimensions—continuous positive ETF capital inflows over more than 20 days and concentrated on-chain wallet growth—point to a conclusion: market attention and participation in XRP are rebounding, and resonance at the capital and user levels has begun.

How Will Japan Financial Services Agency’s Reclassification of XRP Affect Its Asset Attributes

From a supply and demand perspective, XRP’s counter-trend performance might overlook a deeper underlying influence: structural regulatory upgrades.

Japan’s Financial Services Agency plans to remove Ripple’s XRP from the current "cryptocurrency" category under the Payment Services Act before Q2 2026, and formally reclassify it as a "regulated financial product" under the Financial Instruments and Exchange Act. In Japan’s regulatory context, the FIEA covers traditional securities and investment contracts. This means XRP will gain an "investment-grade" legal status comparable to stocks and bonds.

For institutional investors, this regulatory shift reduces compliance costs at least in two ways: first, the custody, disclosure, and trading rules previously limited by the "cryptocurrency" classification will align more closely with mature financial product standards; second, existing arrangements using XRP within Japanese banks and remittance infrastructure will receive clearer regulatory endorsement. After reclassification, exchanges and liquidity providers will need to fully disclose XRP’s price volatility, technical features, and issuer relationships, while insider trading and market manipulation will face stricter legal constraints. This "upgrading" of regulation generally enhances the asset’s investability and liquidity depth over the medium to long term.

Is the Rotation of Institutional Funds a Short-term Trading Behavior or a Long-term Allocation Trend

Looking at the timing structure of ETF capital flows, XRP’s capital attraction is not an isolated event. As of May 2026, since the launch of XRP spot ETFs in November 2025, cumulative net inflows have reached about $1.39 billion. All five US-listed XRP spot ETFs experienced net inflows in that month, with weekly inflows reaching $60.5 million, the peak for 2026 so far.

Meanwhile, Solana ETFs also saw about $55.1 million in inflows. Although Ethereum ETFs still constitute the second-largest category among crypto ETFs in total, their performance in this rotation cycle is significantly weaker than XRP and Solana. CoinShares’ research director noted that investors are "bypassing Bitcoin and Ethereum to seek selective exposure."

From a long-term perspective, XRP ETFs have experienced positive net inflows in approximately 77% of about 26 trading weeks since launch, with only 6 weeks of net outflows. This statistical pattern exceeds the scope of "short-term speculative trading" and more strongly suggests a structural, long-term asset allocation behavior.

Why Do Supply Tightening and Price Reactions Diverge

The above data combination—continuous ETF buying, rising network activity, and regulatory clarity—should logically point toward stronger upward price pressure. However, as of May 25, 2026, XRP’s price has not broken out of the previous oscillation range, and ETF inflows since May have not yet translated into a price breakout.

This divergence can be summarized into three logical constraints:

First, the absolute scale of daily ETF net inflows remains limited compared to observable seller liquidity in the market. Although weekly data is strong, daily net purchases of $8–18 million are insufficient to quickly absorb the accumulated sell orders near historical highs.

Second, in Q1 2026, Goldman Sachs, which held about $154 million in XRP ETF positions at the end of 2025, has liquidated all related holdings. This action partially offsets the marginal demand from other institutional buyers and signals to the market that "top-tier institutions have a phased differing view on XRP."

Third, the rotation from Bitcoin to altcoins typically involves three stages: "confirmation—acceleration—continuation." Currently, the market remains in the confirmation phase—mainstream crypto ETF outflows have not ended, and macro interest rate and risk appetite environments are still contracting. The rotation’s continuation depends on two core variables: changes in Federal Reserve policy expectations and whether regulatory reforms in jurisdictions like Japan can proceed as planned.

Is There a Link Between High Trading Volume in Korea and ETF Net Flows

In XRP’s liquidity structure, Korea plays a significant role. In mid-May 2026, XRP’s daily trading volume on Korea’s Upbit exchange reached about $110.9 million, surpassing Bitcoin’s $88.6 million and Ethereum’s $67 million. Earlier data shows XRP consistently accounts for about 22% of Upbit’s daily trading volume in 2026, often leading in major trading pairs.

Korean market participants are mainly retail investors, whose trading behavior is more momentum-driven, differing in time scale from institutional ETF long-term capital. However, in the price discovery process, retail markets provide liquidity depth and short-term price benchmarks, while ETF institutional funds offer long-term marginal pricing power. The combined effect often enhances market stability and efficiency.

Currently, XRP’s trading volume in Korea exceeds that of Bitcoin and Ethereum, indicating ample liquidity during Asian trading hours, which supports the execution of ETF capital deployment. The positive feedback loop—institutional buying boosting price expectations, which in turn attracts retail liquidity—is a key mechanism for XRP’s potential shift from "counter-cyclical capital attraction" to "trend continuation."

Summary

In May 2026, XRP is at the intersection of multiple structural variables: ETF capital inflows defying the main asset outflows trend, on-chain wallets and active addresses surging within a single day, and Japan’s imminent regulatory reclassification of XRP into a more stringent financial framework.

This combination of facts points to a fundamental judgment: XRP’s current experience is not merely a technical rebound or short-term speculation. The over 20 days of continuous ETF net inflows, over 77% of trading weeks with positive flows since 2026, and a total inflow of $1.39 billion exceed what short-term sentiment can sustain. It is more likely that some institutional funds are making allocation decisions based on long-term investment viability assessments, coinciding with market risk appetite declines for mainstream crypto assets.

On the price level, the marginal buying power has yet to break through high-level supply zones, and major institutions like Goldman Sachs’ Q1 reduction has partially offset other buyers. The market is asking: can XRP’s counter-cyclical attraction evolve from a "phenomenon" into a "trend"? The answer depends on whether Japan’s regulatory reforms proceed as scheduled, whether ETF flows are sustained enough to absorb long-term accumulated seller liquidity, and whether macroeconomic conditions further compress valuation space for all risk assets.

FAQ

Q: What is the approximate total net inflow of XRP spot ETFs since launch?

According to public data, as of May 2026, since its listing in November 2025, XRP US spot ETFs have accumulated about $1.39 billion in net inflows, with the five funds holding approximately 886.8 million XRP tokens. Based on total net inflows, XRP ETFs rank as the third-largest crypto ETF category in the US, after Bitcoin and Ethereum.

Q: When is Japan’s Financial Services Agency expected to complete the reclassification of XRP?

Japan’s FSA plans to complete this policy adjustment before Q2 2026, removing XRP from the "cryptocurrency" category under the Payment Services Act and including it under the "regulated financial products" category of the Financial Instruments and Exchange Act. This will grant XRP a legal status equivalent to traditional securities, with stricter rules against insider trading and market manipulation.

Q: How do the net inflows of XRP ETFs compare with Bitcoin ETF outflows during the same period?

During the week of May 18–22, 2026, Bitcoin spot ETFs experienced about $8M in net outflows, and Ethereum ETFs about $65 million in outflows. In contrast, XRP ETFs saw about $42 million in net inflows, with no single-day net outflows since April 30, 2026, showing a clear flow divergence.

Q: What role does Korea’s market play in XRP’s current liquidity structure?

Korea is a key liquidity source for XRP trading globally. In May 2026, XRP/KRW trading volume on Upbit exceeded Bitcoin and Ethereum, with about $110.9 million in a single day, making it one of the most active trading pairs. Retail trading activity provides liquidity depth and short-term price signals, complementing institutional ETF long-term marginal pricing, supporting sustained capital deployment.

Q: Does Goldman Sachs’ liquidation of XRP ETFs indicate a loss of institutional confidence?

Goldman Sachs liquidated all of its approximately $154 million XRP ETF holdings in Q1 2026. However, this should not be interpreted as a market-wide signal. During the same period, overall XRP ETF net inflows remained positive, with about $116.7 million in May, surpassing April’s $81.59 million, marking the strongest monthly performance of 2026. The simultaneous exit of Goldman Sachs and inflow from other institutions reflect differing views and liquidity absorption capacity among market participants.