XRP's Demand Problem Has Two Faces: Fleeing Fund Money and Forced Futures Unwinds

Two consecutive days of net outflows from US spot XRP exchange-traded funds have put the focus squarely on the sell side, with Grayscale's GXRP accounting for the bulk of the damage. Investors pulled $7.62 million from the products yesterday, following a $10.42 million withdrawal on Monday, according to media reports.

Grayscale's fund alone shed $7.17 million of yesterday's total. Canary Capital's XRPC also recorded redemptions. Until money starts flowing back in on a sustained basis, this channel offers no positive demand impulse for the token — and the pressure is compounded by a derivatives market that is still working through the wreckage of leveraged bets.

Forced liquidations did the heavy lifting

Sunday's slide was sharpened by the forced closure of roughly $39 million in leveraged long XRP positions, against only about $366,000 in short liquidations. The lopsided split lays bare how badly traders positioned for further gains were caught out by the downturn. Those liquidations deepened the broader sell-off.

Open interest in XRP futures fell faster than the price itself, a pattern that points to positions being unwound in the derivatives market rather than fresh conviction selling. A more durable stabilization would need both a fading of selling pressure and a genuine pickup in demand — neither of which is visible yet.

A Ripple veteran's smaller stack

Adding to the narrative of a market under pressure, Ripple CTO Emeritus David Schwartz disclosed that his personal XRP holdings have shrunk from a peak of about 26 million tokens to roughly 3 million. He did not specify when the sales took place or at what prices.

That omission matters. The size of the reduction is clear, but without a timeline it cannot be tied to the recent price weakness, and investors should treat it as context rather than a trigger. What would settle the question is detail on the period over which Schwartz trimmed the position.

Macro headwinds and a Binance hangover

The fund withdrawals and derivatives washout are unfolding against a broadly risk-off backdrop. A technology-stock decline led by Nvidia on Monday weighed on crypto alongside equities. Reuters also reported investor concerns that a Democrat-controlled Congress could tighten cryptocurrency regulation following the US midterm elections.

Sentiment took a further hit from the recent theft at Binance. The exchange said on November 3 that it would absorb the financial consequences itself and would not pass losses on to users — a pledge that addresses customer outcomes but does little to calm the wider market mood.

A multi-year security roadmap running in the background

Far removed from the daily flow data, the XRP Ledger Foundation is pursuing a longer-term security agenda. Its roadmap for 2027, reported yesterday, includes a proposal for quantum-resistant accounts. A migration study is slated for the first half of 2027, with a full transition targeted by 2028. Activation of the proposed upgrade would require validator approval.

For now, that work sits in the background while short-term capital movements dominate the picture. ETF inflows or outflows remain the most immediate barometer for XRP holders; the security roadmap gains weight as a genuine milestone only once proposals turn into approved and implemented steps.