XRP's Diverging Signals: Stablecoin Records Mask a Slowdown in Institutional Flow

XRP's 48% weekly surge faces fading ETF demand, while Ripple's RLUSD stablecoin tops $2B, mostly on Ethereum.

The numbers tell two different stories about XRP right now, and reconciling them is the challenge facing investors. On one hand, Ripple's dollar-pegged stablecoin RLUSD has just blown past a $2 billion circulation milestone, with the bulk of that fresh issuance taking place on Ethereum rather than the XRP Ledger itself. On the other, the institutional money that helped fuel the token's recent surge has hit an air pocket: US spot XRP ETFs pulled in just $1.01 million net during the week through August 8, a dramatic fall from the $14.86 million recorded the prior week.

That juxtaposition — record operational growth alongside fading fund demand — raises a pointed question about what is actually driving XRP's price action.

Where the Rally's Fuel Is Coming From

At $1.48, XRP sits 34 percent above its 50-day moving average of $1.11, a gap that underscores just how quickly the token has moved. The seven-day gain of 48 percent marked the strongest weekly performance in years, enough to push XRP past USDC in the rankings of the largest cryptocurrencies. Yet the technical picture is stretched: the 14-day relative strength index reads 80.6, firmly in overbought territory, and the token remains 54 percent below its 52-week high of $3.18.

The source of that momentum appears to be shifting. Market observers point to a confluence of macro and positioning factors rather than fresh ETF demand. On August 22, an expansion of US Treasury bond buybacks and forced liquidations of short positions lifted crypto prices broadly — a tide that carried XRP along without any token-specific catalyst. Around the same period, large holders, or "whales," accumulated roughly 380 million XRP within a single week, with exchange outflows suggesting a preference for long-term custody over quick trading.

The institutional picture is more nuanced than the weekly flow numbers alone suggest. The seven spot XRP funds collectively hold more than one billion XRP as of August 23, with Goldman Sachs identified as the largest disclosed holder. That substantial existing base means the recent slowdown reflects the pace of new investment rather than any wholesale retreat. Still, the weekly figure represents the weakest showing since a slump in early August, and follows a period when cumulative net inflows across these products had reached $1.55 billion.

Ripple Builds Beyond the Token

The RLUSD milestone fits into a broader pattern of Ripple expanding its infrastructure across multiple fronts. Notably, the decision to issue most of the new stablecoin supply on Ethereum rather than the XRP Ledger suggests the company is prioritizing market reach over directing activity to its native chain — a choice with implications for how much direct demand the stablecoin generates for XRP itself.

Elsewhere, Ripple Prime, the company's institutional arm, closed a $275 million bond issuance on August 18 to fund its finance business. On the regulatory front, CEO Brad Garlinghouse appeared alongside SEC Chair Paul Atkins at the Wyoming Blockchain Symposium the same day, fueling expectations of greater regulatory clarity for XRP without producing concrete decisions.

That appearance marks a shift from roughly two weeks earlier, when the postponed CLARITY Act vote in the US Senate dominated market attention. Since that delay, XRP has climbed 43.8 percent, suggesting the regulatory overhang has receded into the background as operational progress takes center stage.

Reading the Divergence

The market's reaction to the ETF slowdown has been muted so far — XRP dipped 2.5 percent on Tuesday but remains near recent highs. The more telling signal may be what happens next. If the rally is to extend, it will likely need either a revival in ETF inflows or continued whale accumulation and macro tailwinds to fill the gap. The RLUSD growth, while a meaningful validation of Ripple's broader strategy, does not yet translate directly into XRP demand given its Ethereum-centric issuance.

For now, the token's fate rests on whether the forces that powered this surge — short squeezes, Treasury-driven risk appetite, and large-holder accumulation — have staying power, or whether the overbought conditions and fading institutional flows eventually catch up with the price.