Analyst Mike Fay, a contributor to Seeking Alpha, has published an assessment stating that XRP's current valuation is being supported primarily by exchange-traded fund (ETF) demand and investor inflows, rather than growth in its underlying network usage. This analysis comes as XRP-focused ETFs have attracted billions in assets since their U.S. launch in November 2025, with the Canary Capital fund leading at $392.75 million in assets under management (AUM).
Despite a sharp decline in XRP Ledger activity and fees throughout 2025, even amid stablecoin growth on the network, the token's price has found a new foundation. The launch of spot XRP ETFs has provided a critical source of sustained buying pressure, effectively offsetting the slowing on-chain fundamentals.
New data for early 2026 reinforces this dynamic. According to CoinPaper, XRP ETFs absorbed $46.1 million in net inflows, lifting the total value of ETF-held XRP assets to a significant $1.65 billion. These substantial institutional inflows coincided with a price rally that briefly pushed XRP above the key psychological level of $2.40. Although the price has since eased to around $2.37, the ability to hold near this zone signals improved market confidence.
Analysts note this rally was driven by ETF demand rather than short-term speculation, suggesting a more durable source of support. The timing is notable, as institutions appear to be positioning ahead of a potential breakout during a period of consolidation. "ETF inflows are widely viewed as a barometer of institutional conviction," the report states, placing XRP among the most institutionally embraced digital assets outside of Bitcoin and Ethereum.
Technical indicators align with the improving institutional picture. CoinCodex data shows XRP gained over 18% in the first five days of 2026, breaking out from a falling wedge pattern on the daily chart. Analysts see potential for a move toward the $2.60–$2.70 range if the breakout holds, with some longer-term models pointing to targets between $7 and $8 should institutional adoption continue.
On-chain data adds to the bullish case, showing XRP balances on exchanges have dropped to their lowest levels since 2018, signaling reduced sell-side liquidity. The combination of falling exchange supply and persistent ETF demand has historically preceded stronger upside moves, suggesting XRP may be well-positioned for further gains as 2026 unfolds.
