The Hottest Trade of 2026 Isn't Bitcoin - It's XRP ETFs

While Bitcoin and Ethereum traditionally dominate the crypto conversation, 2026 has opened with a dramatic shift in market leadership. In the first week of January, XRP surged approximately 25%, soundly outperforming Bitcoin’s modest 6% gain.

This decoupling has caught the attention of major financial media, with CNBC recently labeling XRP the "new cryptocurrency darling." This surge is being fueled by a historic wave of institutional money flooding into newly launched XRP exchange-traded funds (ETFs), which have amassed a stunning $1.3 billion in assets in just 50 days without a single day of net outflows. 

This naturally puts spot XRP ETFs like Bitwise XRP ETF (XRP), Grayscale XRP Trust ETF (GXRP), and the leveraged ProShares Ultra XRP ETF (UXRP) and Volatility Shares Trust XRP 2X ETF (XRPT) into the global financial spotlight.

What Led to XRP’s Outperformance?

The dramatic outperformance of XRP stems from three converging factors. First was the clearance of a major regulatory overhang. Notably, Ripple's long-running legal battle with the U.S. Securities and Exchange Commission was fully resolved in August 2025, removing a cloud of uncertainty that had long deterred institutional investors. With this clarity, major asset managers like Franklin Templeton, Grayscale and Bitwise launched spot XRP ETFs in November 2025.

Second, these ETFs unlocked unprecedented institutional demand. In December, while Bitcoin and Ethereum ETFs saw massive redemptions, XRP ETFs absorbed $483 million in fresh capital. This represented a historic 43 consecutive days of positive inflows, which continued its trail at the beginning of this year as well, resulting in a solid $1.3 billion in assets since the spot ETFs’ launch in November.

Finally, XRP is seen as a "less crowded trade" compared to Bitcoin and Ethereum. With its smaller relative market size, the massive ETF inflows had a more pronounced impact on its price, creating powerful momentum that is likely to have driven the recent surge.

The 2026 Outlook: Can the XRP ETF Rally Continue?

The outlook for crypto in 2026 hinges on macroeconomic conditions and adoption, but several strong catalysts can be expected to propel XRP ETFs further. Analysts point to structural supply tightness as a key driver. The $1.3 billion in ETF assets has effectively locked up more than 500 million XRP tokens. If monthly inflows continue at roughly December’s pace, ETFs could remove billions of dollars’ worth of XRP from the circulating supply by year-end, creating scarcity that has historically preceded significant price moves.

Positive market sentiment is also bolstered by Ripple's expanding business footprint. Notably, in November, Ripples bagged a $500 million strategic investment at a $40 billion valuation from world-class institutional investors. Furthermore, Ripple’s partnership with Mastercard and Gemini to enable stablecoin payments for credit card transactions should help integrate XRP deeper into the financial infrastructure. 

However, risks to investing in XRP persist, including the potential for an economic slowdown and renewed Federal Reserve tightening that could dampen crypto enthusiasm; nonetheless, the technical and fundamental setup remains strong. Significant structural hurdles also remain for XRP. These include concerns over centralization and high volatility—which can hinder XRP’s use as a bridge currency—as well as the fact that Ripple continues to control a large portion of the token supply.

Therefore, investors interested in XRP ETFs should invest with caution, keeping in mind the aforementioned risk factors. 

Spotlight on the Leading XRP ETFs

For investors, the following ETFs present the primary vehicle to gain exposure to XRP without the complexities of direct crypto ownership:

Bitwise XRP ETF XRP

This fund, with a market price of $24.38 as of Jan. 7, 2026, holds assets under management (AUM) worth $309.7 million. 

It has surged 20.6% year to date and charges 34 basis points (bps) as fees. The fund traded at a volume of 0.57 million shares in the last trading session. 

Grayscale XRP Trust ETF GXRP

This fund, with a market price of $42.27 as of Jan. 7, 2026, holds AUM worth $277.8 million. 

It has risen 19% year to date and will charge 35 bps as fees (after a 3-month waiver period ending February 24, 2026). The fund traded at a volume of 0.09 million shares in the last trading session. 

ProShares Ultra XRP ETF UXRP

This fund, with a market price of $12.47 as of Jan. 7, 2026, corresponds to two times (2x) the daily performance of the Bloomberg XRP Index. 
It has soared 37.8% year to date and charges 164 bps as fees. The fund traded at a volume of 0.34 million shares in the last trading session. 

Volatility Shares Trust XRP 2X ETF XRPT

This fund, with a market price of $6.78 as of Jan. 7, 2026, holds assets worth $142.9 million and aims to deliver twice the daily performance of XRP through a registered, transparent investment vehicle.

It has soared 37.5% year to date and charges 94 bps as fees. The fund traded at a volume of 2.76 million shares in the last trading session. 

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This article originally published on Zacks Investment Research (zacks.com).

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