- XRP’s price remains stable despite large ETF inflows, explains Bitwise.
- Bitwise uses OTC trading to prevent XRP price fluctuations.
- Institutional market makers help secure better XRP prices in ETFs.
XRP’s recent inflows into exchange-traded funds (ETFs) have sparked interest among cryptocurrency enthusiasts, leaving many to wonder why these large investments haven’t resulted in a price surge. According to Matt Hougan, the Chief Investment Officer (CIO) of Bitwise, the process behind these transactions is more intricate than it may seem at first glance.
How Bitwise Handles XRP ETF Purchases: The OTC Strategy
According to a post shared by CryptosRus, Bitwise strategically avoids purchasing XRP directly from the open market to prevent large price fluctuations. Instead, they use over-the-counter (OTC) transactions. This method allows them to secure better deals without pushing the price higher with substantial purchases.
When Bitwise receives significant inflows into its ETF, like $100 million, they reach out to major institutional market makers, including Jane Street, Susquehanna, Goldman Sachs, and Macquarie Bank. These firms are asked to submit their best prices for purchasing large quantities of XRP. After receiving the bids, Bitwise negotiates to secure the most favorable deal for its investors.
Once the price is agreed upon, the selected market maker, such as Jane Street, executes the transaction. The XRP is then transferred to Bitwise’s custodian, completing the process without causing any disruption to the market price.
Also Read: Egrag Crypto Presents XRP Fractal Analysis Update, Here Are 2026 Price Targets if Structure Holds
Why This Method Prevents Price Spikes
The reason ETF inflows don’t lead to a spike in XRP’s price is because of the OTC strategy employed by Bitwise. By executing these transactions privately, they avoid massive buy orders flooding the open market, which can often cause volatility. This process ensures that XRP’s price remains stable, even when there are significant ETF inflows.
Although it might seem that large purchases would cause the price to rise, Bitwise’s approach prevents any sharp price movements. This ensures smoother, more predictable price action, protecting both the ETF investors and the broader market.
Bitwise’s method of executing large trades through OTC ensures stability in the market, shielding XRP from sudden price fluctuations. Despite substantial ETF inflows, XRP’s price remains unaffected in the short term, highlighting the role of strategic trading in maintaining market equilibrium.
Also Read: $453,000,000 XRP Open Interest Drop on Binance, But There Is a Catch
