Five major US spot XRP products held XRP with a combined fair value $746.1 million below accounting cost at the end of June, but investors kept buying anyway.
According to SEC filings, Bitwise, Canary Capital, Franklin Templeton, 21Shares, and Grayscale recorded roughly $629.9 million in primary-market share creations against $309.1 million in redemptions during the first half of the year.
That left capital activity positive by about $320.8 million even as the funds’ combined XRP holdings sat 44.1% below their $1.7 billion accounting cost.
The gap quantifies what Bloomberg ETF analyst James Seyffart called “surprisingly resilient” XRP ETF demand in an Aug. 31 post, where he put cumulative net inflows across the asset class at $1.8 billion.
| Five-fund XRP ETF snapshot | Amount |
|---|---|
| XRP accounting cost at June 30 | $1.693B |
| XRP fair value at June 30 | $947.3M |
| Gap vs accounting cost | -$746.1M |
| Percent below cost | -44.1% |
| H1 share creations | $629.9M |
| H1 redemptions | $309.1M |
| Net capital activity | +$320.8M |
Why anyone would buy into a position already underwater
Fair value across the sample of five funds totaled $947.3 million as of June 30, versus the nearly $1.7 billion those funds had originally paid.
That decline alone would normally signal selling, since a fund holding an asset at less than half its recorded value gives shareholders every incentive to redeem and reallocate elsewhere.
New creations kept arriving faster than shares left, pushing the aggregate net figure positive despite the size of the paper decline sitting inside the funds themselves.
Bitwise, Canary and Franklin recorded $537.9 million in first-half creations against just $53.3 million in redemptions, a net inflow of roughly $484.5 million. Only about $9.90 left those three funds for every $100 that came in, and it happened while their combined XRP holdings traded 42.9% below accounting cost.
Grayscale and 21Shares recorded $92.1 million in creations against $255.8 million in redemptions, a net outflow of $163.7 million that accounted for roughly 83% of all redemptions across the five-fund sample.
Grayscale alone saw $180.8 million redeemed against just $66.6 million created, while 21Shares recorded $75 million of redemptions against $25.5 million of creations.
The aggregate $320.8 million figure reads as resilient because inflows at three funds overwhelmed outflows at the other two. Even large redemptions at Grayscale and 21Shares were offset by unusually sticky creation activity at Bitwise, Canary and Franklin.
| Fund | XRP below cost | H1 creations | H1 redemptions | H1 net activity |
|---|---|---|---|---|
| Bitwise | -$180.8M | $268.2M | $33.8M | +$234.4M |
| Canary | -$229.2M | $88.3M | $5.9M | +$82.4M |
| Franklin | -$174.5M | $181.4M | $13.6M | +$167.8M |
| 21Shares | -$113.5M | $25.5M | $75.0M | -$49.5M |
| Grayscale | -$48.0M | $66.6M | $180.8M | -$114.2M |
What the numbers establish
Enough fresh capital arrived at a handful of funds to absorb real selling elsewhere in the same product category. Some of that apparent resilience may also reflect rotation, with investors exiting higher-fee or legacy products while entering funds they consider better structured.
That is a different pattern than every cohort of XRP ETF shareholders independently believing in the trade.
The $746.1 million figure measures the gap between the funds’ recorded XRP cost and its June 30 fair value, a fund-level accounting figure. That sits apart from the personal cost basis of individual shareholders, who bought and sold at many different prices across the period.
Creations and redemptions likewise happen between the funds and authorized participants in the primary market, a mechanism distinct from retail investors directly depositing or withdrawing cash.
REX-Osprey’s XRPR sits outside this analysis entirely, since its 1940 Act structure and ability to gain XRP exposure through other funds make its balance sheet a poor match for the five grantor-trust products compared here.
Cumulative XRP ETF inflows reached nearly $1.6 billion by Aug. 24 and $1.64 billion by Aug. 29, before Seyffart’s $1.8 billion figure at month’s end. That trajectory shows June 30 captured a moment in a longer pattern, well short of its end.
BTC trades near $78,000, and spot Bitcoin ETFs pulled in roughly $2.5 billion over seven trading days in late August before a rare single-day outflow. Bitcoin’s inflows are returning as price sits near a level investors already recognize.
XRP’s flows kept building through a far deeper drawdown, with the funds’ own holdings still trading well below what they paid.
How far XRP has to recover before the accounting pain disappears
The five funds held roughly 906.8 million XRP at June 30, implying a rough cost-basis breakeven near $1.87 per token. XRP currently trades around $1.38, meaning the sample would remain underwater if marked at today’s price.
| XRP price scenario | Implied value of 906.8M XRP | Gap vs $1.693B cost | What it means |
|---|---|---|---|
| $0.75 bear case | ~$680M | ~60% below cost | Redemptions may spread beyond Grayscale and 21Shares |
| $0.90 bear case | ~$816M | ~52% below cost | ETF resilience faces a deeper stress test |
| $1.38 current price | ~$1.25B | ~26% below cost | Funds remain underwater, but less severely than June 30 |
| $1.50 recovery case | ~$1.36B | ~20% below cost | Accounting pain narrows but does not disappear |
| $1.87 breakeven | ~$1.70B | Roughly flat | Five-fund cost basis is largely recovered |
| $1.90 bull case | ~$1.72B | Slightly above cost | Resilience narrative turns into vindication |
The bull case has XRP climbing back toward the $1.50 to $1.90 range, which would erase most of the accounting gap without requiring a fresh cycle high.
Under that path, the funds currently sitting deepest underwater see their fair value close in on cost. The resilience story shifts from a stress test into simple vindication for the investors who kept buying through the drawdown.
The bear case has XRP sliding toward $0.75 to $0.90, pushing the five-fund sample 52% to 60% below cost. In that scenario, the real test shifts to whether the redemption pattern already visible at Grayscale and 21Shares starts showing up across the rest of the complex.
Regulated XRP demand behaved this year like conviction buying into a known loss. Whether that conviction was broadly shared or concentrated in a few funds now depends on where XRP trades next.
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