XRP Navigates a Crosscurrent of Supply and Institutional Demand

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February presents a challenging landscape for XRP, with headwinds extending beyond the broader cryptocurrency market's weakness. Compounding the situation is Ripple's scheduled monthly release of tokens from its escrow accounts. This recurring event once again places the market's capacity to absorb additional liquidity under scrutiny.

Despite recent risk-off sentiment across digital assets, one segment has demonstrated remarkable resilience: XRP-focused investment products. Spot exchange-traded funds (ETFs) for XRP, which launched in late 2025, have now aggregated over $1.3 billion in assets under management. Notably, an analysis from 21Shares dated January 23 highlighted a record 55-day streak of consecutive net inflows following their debut—a pattern unmatched across asset classes.

This sustained demand stands in stark contrast to the wider market outflow of $1.7 billion from crypto investment products recorded in the final week of January. The dynamic creates a fundamental tension for XRP: predictable new supply from escrow releases meets consistent, institutional-grade demand capable of absorbing a significant portion of it.

The Mechanics of February's Escrow Release

As anticipated, Ripple unlocked 1 billion XRP from escrow on February 1. The company followed its established protocol by immediately relocking a substantial majority of these tokens. Specifically, 700 million XRP were placed into new escrow contracts with a maturity date set for December 2026.

The remaining 300 million XRP were transferred to Ripple's operational liquidity wallet. These funds are accessible for corporate use, which can include over-the-counter (OTC) sales or exchange deposits. Relative to the circulating supply, this liquid portion represents approximately 0.5%—a volume considered modest enough to avoid triggering automatic price depreciation, yet potentially influential as an additional selling factor in a fragile market environment.

This mechanism remains transparent and scheduled. With roughly 60.85 billion XRP currently in circulation, these monthly releases represent a recurring supply stream expected to continue for approximately 48 more months.

Regulatory Landscape: Clearer Skies and New Hurdles

The regulatory backdrop for XRP has improved significantly compared to 2024. The protracted legal battle with the U.S. Securities and Exchange Commission (SEC) concluded in August 2025 with a settlement of $125 million—a figure substantially below the SEC's initial $2 billion penalty request.

Furthermore, Ripple secured a key authorization in Europe, obtaining a full Electronic Money Institution (EMI) license from Luxembourg's CSSF. This license facilitates an expansion of its activities within the European Union.

However, progress on a separate U.S. political front has stalled. The Digital Asset Market CLARITY Act, which would explicitly classify XRP as a non-security, encountered obstacles in January. A pivotal committee hearing in the Senate was postponed after Coinbase CEO Brian Armstrong withdrew his support. The legislation currently faces over 130 pending amendments.

Key Data Points at a Glance

• Escrow Activity: 1 billion XRP released; 700 million subsequently relocked; 300 million moved to Ripple's liquidity account.
• ETF Metrics: XRP spot ETFs hold > $1.3 billion in AUM, following an initial 55-day inflow streak.
• Regulatory Status: SEC case settled for $125 million; EMI license secured in Luxembourg; CLARITY Act currently delayed.
• Market Context: XRP faces near-term pressure, trading at $1.58, which also marks its current 52-week low.

The short-term trajectory for XRP in February appears likely to hinge on whether the institutional ETF inflows persist at a rate sufficient to counterbalance the monthly escrow-derived supply, or if the combination of this scheduled liquidity and broader market weakness sustains selling pressure.