As US, Israel, and Iran tensions escalate, the pressure is spilling from traditional markets into digital assets, and XRP ETFs demonstrate institutional uncertainty through the flow data.
First monthly outflows end XRP ETFs’ strong run
XRP exchange-traded funds have recorded their first cumulative monthly outflows since launching in mid-November 2025, ending a streak that made them a standout story in the crypto space.
SoSoValue data shows XRP ETFs saw $31.16 million in withdrawals last month. They underperformed Bitcoin ETFs, which attracted $1.32 billion net inflows in March.
The reversal has grabbed attention since it represents the first monthly negative flows since the strong run that propelled the ETF’s valuation past $1 billion in the first 50 days after debuting.
Notably, the XRP funds were unusually strong during the early sessions. They went 43 straight days without any 24-hour outflow, setting records for a newly launched product.
XRP ETFs became the second-fastest asset to cross the billion-dollar mark after Bitcoin.
Geopolitical tensions trigger risk-off mode
However, XRP’s momentum switched following the Middle East war that started on February 28.
Markets reacted immediately, with risk assets recording heavy liquidations. Sentiment flipped to extreme fear as investors flew to traditional alternatives, specifically gold and silver.
While crypto displayed resilience as assets stabilized quicker, institutional rotation couldn’t be undone.
Institutional players adopted a defensive mood, reducing exposure to crypto products, including crypto ETFs, amid amplified volatility across equity and energy markets.
XRP ETF demand cools
Indeed, XRP ETFs faced their first real test of institutional demand in March. They stayed muted in most sessions of the month.
We see the total AUM has eased to around $1.2 billion, backed by around 769.8 million XRP tokens.
While this pullback doesn’t conclude XRP ETF’s remarkable launch story, it shows how macro shocks can impact institutional appetite.
Ripple continues tapping the institutional stack
While the funds have cooled, XRP’s institutional case remains alive.
Ripple has continued to its broad its scope and expand its dominance in the crypto payments sector. Yesterday, the company announced a strategic collaboration with Convera to enrich institutional cross-border transactions.
Further, Ripple has opened more entry points beyond spot ETFs. Enterprises can now join the XRP Ledger and XRP ecosystem through payments, regulated RLUSD stablecoin, prime brokerage, custody, and treasury tools.
It also bought GTreasury to strengthen its footprint in corporate finance.
That makes XRP’s price not tied to a single monthly ETF flow. That native token is trading at $1.35 and has stayed relatively stable over the past month, with a mere 0.5% decline.
Geopolitical tensions will continue to determine short-term sentiments as factors like the CLARITY Act move in the background.
