XRP ETF outflows reflected a broader slowdown in market demand as several indicators weakened at the same time. The latest figures show that regulated investment products, futures markets and on-chain activity all lost momentum, suggesting investors have become more cautious in the near term.
While the XRP Ledger (XRPL) continues expanding its institutional infrastructure and tokenized asset ecosystem, current network data indicates that wider user participation has yet to recover. The contrast underscores a market where enterprise development continues to advance even as overall demand remains under pressure.
What Do XRP ETF Outflows Reveal About the Current Market?
XRP ETF outflows point to weaker investor demand across regulated investment products after several weeks of steady inflows. US spot XRP exchange-traded funds recorded about $7.2 million in net outflows during the week ended July 10. The withdrawals ended a nine-week inflow streak that had brought nearly $200 million into the products.
The weekly withdrawal ranked among the five largest outflow weeks for XRP funds this year. Despite that reversal, the products have still attracted cumulative net inflows of $1.48 billion, while their combined assets approached $1 billion by the end of the week. The change in fund flows arrived alongside weaker derivatives positioning and slower network participation, indicating that demand has cooled across multiple areas of the XRP market.
Why Are Futures Traders Reducing Their Exposure?
The decline in fund demand has also become visible in the derivatives market, where traders have scaled back leveraged positions. Global open interest in XRP futures declined from nearly $3 billion in June to about $2.30 billion by mid-July. On Binance, open interest dropped from more than $500 million in mid-June to $399 million by July 10.
Long liquidations increased 94% from the previous week and stood 172% above their three-month average, while short liquidations declined by more than half. Despite shrinking open interest, Binance’s XRP funding rate climbed 266% during the week. The imbalance suggests that the remaining bullish traders are paying higher premiums to maintain long exposure even as the overall derivatives market contracts.
CoinGlass data also showed XRP futures trading volume at $1.40 billion over the past 24 hours, with open interest standing at $2.30 billion. Around $4.28 million in XRP futures positions were liquidated during the same period, reflecting continued adjustments in market leverage.
How Is On-Chain Activity Reflecting Slower Demand?
The softer market environment has also affected participation across the XRP Ledger. Blockchain analytics platform Santiment reported that XRPL recorded only 25,350 active wallets, marking its second-quietest day of 2026. New wallet creation fell to 2,130, the lowest level since November 2024.
The slowdown followed a brief increase in dip-buying activity during late June before both active wallet numbers and new participant growth retreated once again. The latest figures suggest that traders are waiting for a stronger catalyst before returning to the network.
Why Is Network Activity Becoming More Concentrated?
Although overall participation has weakened, activity has become increasingly concentrated among existing platforms operating on XRPL. XRPL validator Vet said transactions containing source tags increased 28.6%, while the number of source tags rose 13%. Source tags are commonly used by exchanges, payment providers and other services to identify transactions associated with shared customer accounts. Vet stated, “New wallets participating looks flat for now, tells me existing users are more active than before.”
CryptoQuant data showed transaction counts increased around 3% to 4% over the previous week and month. However, they remained roughly 21% below their three-month average, while active addresses were still 11% below their three-month baseline. The figures indicate that established applications continue generating activity, but broader network participation remains below longer-term averages.
Can Institutional Expansion Offset Weak Market Participation?
The growing institutional pipeline has become increasingly important as XRP ETF outflows coincide with weaker demand across several market indicators. Over the past week, XRP declined about 5% to roughly $1.11 as ETF demand, futures exposure and wallet growth all softened.
At the same time, Evernorth, an XRP-focused digital asset treasury company, said approximately $4 billion in tokenized real-world assets linked to XRPL now span more than 500 products. Developers are also advancing the proposed XLS-96 standard, which would introduce confidential transfers for Multi-Purpose Tokens.
The proposal would use encryption together with zero-knowledge proofs to conceal balances and transfer amounts while allowing validators to verify compliance with the ledger’s supply rules. The proposal also includes selective disclosure, allowing issuers to provide transaction information to regulators and auditors without exposing it publicly.
Existing controls such as freezing and clawback functions would remain available for confidential assets. Institutional adoption is already producing practical use cases. In May, Ondo Finance, Ripple, Mastercard and JPMorgan’s Kinexys platform completed a cross-border redemption involving Ondo’s tokenized US Treasury product.
The tokenized asset was processed on XRPL in less than five seconds while the corresponding dollar payment moved through Kinexys and JPMorgan’s banking infrastructure. These developments demonstrate continued institutional progress. However, the latest market and network data show that this expansion has not yet translated into broader user participation or stronger demand across the XRP ecosystem.
What Could Determine the Next Phase for XRP?
Current data shows weaker participation across ETFs, derivatives markets and on-chain activity at the same time. Institutional infrastructure on XRPL continues to grow through tokenized assets and privacy-focused development, but overall network activity remains below longer-term averages.
The next stage will likely depend on whether expanding institutional use eventually encourages broader participation rather than remaining concentrated among existing platforms.
Conclusion
XRP ETF outflows reflect a broader decline in market participation that extends beyond investment products into futures trading and on-chain activity. The latest figures show softer investor demand, lower leveraged exposure and slower wallet growth even as XRPL continues expanding its institutional capabilities.
While the network is advancing tokenized asset initiatives and privacy-focused infrastructure, transaction activity and active addresses remain below their longer-term averages, showing that broader adoption has yet to strengthen. Whether those institutional developments eventually support demand will depend on their ability to translate into sustained network usage rather than infrastructure growth alone.
Glossary
XRP Ledger (XRPL): Blockchain network that powers XRP transactions.
Futures Trading: Trading contracts based on XRP’s future price.
On-Chain Activity: Transactions and user activity recorded on the blockchain.
Confidential Transfers: Private blockchain transactions with hidden balances and amounts.
Multi-Purpose Tokens (MPTs): XRPL tokens designed for multiple asset use cases.
Frequently Asked Questions About XRP ETF Outflows
How much money left XRP ETFs recently?
About $7.2 million left US spot XRP ETFs during the week ended July 10.
What happened to XRP futures open interest?
XRP futures open interest fell from nearly $3 billion to about $2.3 billion, showing lower trader participation.
Why is XRP demand weakening?
XRP demand is weakening because ETF flows, futures activity and wallet growth have all slowed.
How is XRPL network activity changing?
XRPL network activity has slowed as active wallets and new wallet creation have both declined.
Can institutional growth help XRP demand recover?
Institutional growth could support XRP demand if it leads to more users and higher network activity.
Sources
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