Zach Pandl, Head of Research at Grayscale, has highlighted a development that could affect the supply balance and long-term price structure of the XRP market. On the program “The XRP Pod,” Pandl stated that, if spot XRP ETFs follow a trajectory similar to those of Bitcoin and Ethereum, they might absorb roughly 5 to 6 percent of the total circulating supply.
Potential supply contraction takes center stage
Pandl’s focus here is not on valuation, but on direct purchases of XRP. As investments flow into ETF shares, issuers are required to buy actual XRP from the market and hold these tokens to back the products. Because these tokens are stored with custodians, the amount of XRP freely trading on exchanges diminishes. With increasing inflows, the volume of locked-up supply is expected to grow substantially.
If spot XRP ETFs track the adoption patterns of Bitcoin and Ethereum, up to 5 to 6 percent of the circulating XRP supply could be transferred to ETF custody, Pandl explained during the broadcast.
Given XRP’s vast circulating supply, this translates to billions of tokens being removed from open market availability. A reduction in liquid supply may lead to sharper price movements during periods of heightened demand. With less liquidity, even relatively modest inflows could significantly boost volatility.
Institutional interest gains momentum
According to the analysis presented, XRP ETFs are not simply viewed as new investment vehicles; they represent a regulated channel for pension funds, asset managers, and registered investment advisors to access XRP without holding the asset directly. This regulated structure could create more stable institutional demand, contrasting with past periods dominated by retail investors. Grayscale remains notable as a US-based asset management company specializing in digital asset investment products.
Glossary: A 13F filing is a report regularly submitted to the SEC by major institutional investment managers in the US, disclosing their positions in certain securities. “RIA” stands for Registered Investment Advisor, referring to institutions licensed to provide portfolio advisory services.
Initial data appears to back up this view. Institutional interest in XRP-linked investment products has accelerated, with weekly inflows recently reaching their highest level so far in 2026. These trends have fueled expectations that XRP is beginning to find its way into institutional portfolios via regulated financial products.
Meanwhile, in its latest 13F filing to the US Securities and Exchange Commission, Morgan Stanley disclosed exposure to XRP-focused exchange-traded funds. The report confirms that the bank holds positions in both the Volatility Shares XRP ETF and Grayscale’s GXRP product.
Morgan Stanley’s latest 13F filing, listing positions in Volatility Shares XRP ETF and Grayscale GXRP, signals that initial Wall Street engagement has begun.
Main market question set to shift
This emerging landscape points to a familiar institutional pattern: the gradual absorption of supply into regulated financial products. If the current trend persists, the crucial question for XRP may move from whether demand will increase, to how much tradable supply will remain once large-scale institutional buying accelerates.
