XRP Demand Builds on ETF ‘Optimism’ as Ethereum Funds Bleed $255 Million

Last week, both Donald Trump and the Federal Reserve caused crypto investments to experience turmoil.

Investment products for digital assets, which encompassed spot Bitcoin and Ethereum ETFs, altogether recorded merely $48 million in inflows last week, as per CoinShares. Bitcoin assets concluded the week with $214 million in net inflows, whereas Ethereum suffered a loss of $255 million.

At the beginning of the week, investors held $1 billion in cryptocurrency investments, but a promising start to the New Year was swiftly overshadowed by macroeconomic concerns. Aggressive minutes from the Federal Reserve’s most recent meeting combined with strong indicators of the U.S. economy prompted investors to withdraw $940 million from digital asset investment products—effectively neutralizing the initial inflows.

“This indicates that the post-election euphoria in the U.S. has concluded, and macroeconomic data is once again playing a significant role in driving asset valuations,” remarked James Butterfill, Head of Research at CoinShares.

Recent minutes from the Federal Reserve revealed that policy makers are perceiving potential changes in immigration and trade policy under President-elect Donald Trump as a source of inflationary pressures. In December, they also hinted at a slower pace of rate cuts this year.

Typically, equities and crypto assets flourish in environments of reduced interest rates, as lower borrowing costs and increased liquidity prevail. However, amid a succession of reports indicating the U.S. economy remains robust, some analysts claim that the Fed’s strategy of easing is virtually concluded.

Along with the recent strength of the U.S. economy, Butterfill conveyed to Decrypt that the potential for Bitcoin’s price growth is constrained from a macro perspective, while “the market appears to be in a pessimistic mindset.”

“Any upward momentum for Bitcoin is more probably to stem from the approval of Bitcoin-related legislation following [Trump’s swearing-in] or some notable missteps,” he stated.

In the previous week, Bitcoin’s price has decreased by 10% to $91,600, marking its lowest price in two months. Conversely, Ethereum’s value has declined 18% to $3,000, while XRP has remained relatively stable at $2.43.

With XRP products attracting $41 million, Butterfill noted that the altcoin is experiencing “increased optimism” ahead of a deadline for the approval of spot XRP ETFs in the U.S. occurring later this month. Bloomberg ETF Analysts James Seyffart formerly commented that the applications are unlikely to be regarded seriously until there is a shift in agency leadership under Trump.

In 2024, investors directed $42.9 billion towards Bitcoin and Ethereum products, contributing cash alongside the introduction of spot ETFs for cryptocurrencies in the U.S. Thus far in 2025, Bitcoin products have garnered $797 million, whereas Ethereum products have surrendered $274 million.

Although the decreasing likelihood of Federal Reserve rate cuts represents a net negative for the crypto sector, inflows may soon recover, Bitwise Senior Investment Strategist Juan Leon informed Decrypt.

Within the U.S., spot Bitcoin ETFs are undergoing due diligence processes among registered investment advisors and wirehouses, Leon explained. As financial institutions navigate the approval procedures, inflows could intensify, as governments and corporations might purchase Bitcoin as well.

“This will push Bitcoin’s price higher,” Leon remarked. “We anticipate that inflows into spot Bitcoin ETFs will surpass those of last year.”

Edited by Andrew Hayward