XRP's Regulatory Fate Hinges on a Two-Week Senate Window

XRP's 6-month slump may end as the CLARITY Act gains political support, international ETFs see $120M inflows, and large wallets accumulate heavily ahead of a key Senate deadline.

The price of XRP has been mired in a six-month losing streak, a pattern not seen since 2014. Yet beneath this surface weakness, a powerful confluence of political momentum, aggressive accumulation by large holders, and diverging institutional flows suggests a potential inflection point is near, centered on a critical legislative deadline in Washington.

The catalyst is the CLARITY Act. In a dramatic 24-hour shift, three key figures publicly backed the legislation. Coinbase CEO Brian Armstrong, who had twice blocked the bill, reversed his position on April 9. Simultaneously, Treasury Secretary Scott Bessent published an op-ed urging the Senate to pass the law before the midterm election calendar dominates, framing it as a national security issue to stem the outflow of crypto firms to jurisdictions like Singapore and Abu Dhabi. SEC Chair Paul Atkins followed hours later, stating his agency was ready to implement the law once Congress acts.

The Senate returns from recess on April 13, giving the Banking Committee a tight two-week window to advance the markup. If the process stalls beyond May, the bill is likely shelved for the remainder of 2026. Prediction markets on Polymarket currently price the odds of a 2026 passage at 72%. The act would permanently classify XRP as a commodity under federal law, a move analysts at Standard Chartered estimate could unlock an additional $4 to $8 billion in ETF inflows.

This regulatory uncertainty is mirrored in starkly divergent institutional behavior. While global crypto ETPs saw inflows of $224 million last week—rebounding from outflows of $414 million the prior week—XRP-specific flows told a nuanced story. The asset attracted roughly $120 million, accounting for over half of the global total and marking its strongest weekly inflow since mid-December 2025. Notably, virtually none of this capital came from the United States. The five US-listed XRP spot ETFs have seen almost no daily inflows over the past two weeks, with their total net assets stagnant at approximately $940 million, down from a January high of $1.24 billion. The recent $120 million surge originated almost exclusively from European and international ETP demand.

On-chain data reveals a separate bullish signal. According to CryptoQuant, large wallets have been accumulating an average of over 11 million XRP daily since late March, hitting a ten-month high. Concurrently, accelerating exchange outflows are reducing the available sell-side supply on trading platforms.

Amid this backdrop, Ripple continues to build institutional infrastructure. The company announced 12 new ODL currency pairs at the XRP Tokyo conference, focusing on Southeast Asia where cross-border payments are growing over 10% annually. Japanese pilot projects there have documented cost reductions of up to 60% compared to SWIFT. Domestically, Ripple Prime now allows institutions to cross-margin XRP positions alongside gold, silver, and oil exposures using RLUSD as collateral. Ripple's stablecoin, RLUSD, has seen its market capitalization balloon to $1.56 billion from $132 million a year ago.

The current price weakness has clear origins. The massive leveraged liquidation triggered by Trump's 100% tariff announcement against China in October wiped out roughly $19 billion in positions within 24 hours. Approximately 60% of the circulating XRP supply is now held at a loss, creating consistent sell pressure on any move toward the average cost basis of $1.44. XRP currently trades just below that level, more than 60% below its cycle high from last July, supported somewhat by improved market sentiment following US-Iran ceasefire talks.

The coming fortnight will be decisive. The Senate's action—or inaction—on the CLARITY Act will determine whether XRP secures the regulatory clarity needed to catalyze its dormant US institutional market or remains in legislative limbo for the rest of the year.