XRP drops as SEC lawsuit blocks ETF inflows

XRP slipped further behind the rest of the crypto market in the latest rally, even as Bitcoin and Ethereum enjoy fresh institutional inflows from newly approved exchange‑traded funds (ETFs). Over the past month, XRP’s price has fallen about 15%, trading around $0.48, while Bitcoin has climbed 22% to $73,000 and Ethereum 18% to $4,700. The two ETFs, a Bitcoin trust launched in March and a spot‑Ethereum fund that closed in June, have collectively attracted more than $3 billion in net purchases from hedge funds and pension plans, according to Bloomberg data.

The gap has widened because XRP remains in the crosshairs of the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs, which began in 2020. The SEC alleges that Ripple’s sale of XRP constituted an unregistered securities offering. The court case has kept the token off the radar of many institutional investors who prefer assets with clearer regulatory status. Meanwhile, regulators have moved quickly to approve Bitcoin and Ethereum ETFs, signaling confidence in those markets while leaving XRP in limbo.

Ripple’s market cap sits around $10 billion, but its trading volume has dipped below $200 million daily, a sharp decline from the $500 million it saw in late 2022. CEO Brad Garlinghouse has said the company is “focused on a positive resolution” and that the legal outcome could unlock a new wave of demand. Yet analysts warn that even a favorable ruling may take time to translate into price gains, as investors still weigh the risk of a possible SEC decision that could label XRP a security and impose stricter controls.

Looking ahead, the crypto industry will watch closely as regulators consider additional ETFs for other assets, and as the SEC is expected to rule on Ripple’s case in the next quarter. If the lawsuit is settled in Ripple’s favor, the token could see a surge in liquidity and price. Conversely, a ruling that classifies XRP as a security could further limit its appeal to institutional buyers and deepen its lag behind the broader market. The outcome will shape not only XRP’s trajectory but also the broader debate over how digital assets fit into regulated investment products.