Up to $8 billion to pour into XRP ETF? CLARITY Act passage is the variable

▲ XRP ETF/ChatGPT generated image ©

The spot XRP (Ripple) ETF market is moving towards a major turning point amidst quiet capital inflows. Market expectations are reviving, with forecasts suggesting institutional funds could pour in up to $8 billion if the US cryptocurrency market structure bill, the CLARITY Act, becomes a reality in the Senate vote.

According to the investment media outlet TradingNews on May 27 (local time), the total assets under management (AUM) in the US spot XRP ETF market are currently estimated at approximately $1.4 billion. Volatility Shares XRP ETF (XRPI) traded at $7.91 on this day, Rex-Osprey XRP ETF (XRPR) at $11.54, and Bitwise XRP ETF recorded a level of $15.18. The outlet reported that cumulative net inflows have increased to approximately $1.44 billion since the launch of the spot XRP ETF last November.

Recent fund flows are also positive. The spot XRP ETF market has seen net inflows for 9 consecutive trading days, with a total of $95.5 million flowing in. Notably, in April, a net inflow of $81.63 million occurred, the largest monthly amount this year. This contrasts with the significant outflows from the spot Bitcoin ETF market during the same period. The outlet analyzed that institutional investors are focusing on the possibility of mid-to-long-term regulatory easing for XRP rather than short-term price movements.

The biggest variable in the market is the CLARITY Act. This bill includes provisions classifying XRP as a commodity rather than a security and passed the Senate Banking Committee on May 14 with a vote of 15 to 9. Citing analysis from global investment bank Standard Chartered, the outlet predicted that an additional $4 billion to $8 billion could flow into the spot XRP ETF market if the bill ultimately passes the Senate. This is up to six times the current size of the XRP ETF market's funds.

However, the short-term technical trend is still unstable. The current spot XRP price is around $1.37, trading below its key resistance level, the 200-day moving average of $1.4512. The Relative Strength Index (RSI) has fallen to around 43, and it remains below major moving averages, indicating a continued bearish trend. The outlet analyzed that if XRP fails to maintain the $1.32 support level, further correction is possible.

The outlet diagnosed that the next 30-60 days will be a critical period determining the direction of the XRP ETF market. If the CLARITY Act passes the Senate and risk appetite revives, XRPI could rebound to $12-$15, and XRPR to $17-$22. Conversely, if the bill is delayed and US inflation pressures persist, XRP could once again test the early $1 support level.

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