XRP ETF investors refuse to sell despite sitting 25 percent underwater: what 1.19 billion XRP of stubborn exposure means for your portfolio

XRP has fallen to roughly 1.29 USD, about a quarter below the estimated acquisition cost of all the exposure piled into US-listed XRP exchange-traded funds — and yet ETF investors are almost entirely refusing to sell, according to the latest settled holdings data.

Data tracker XRP Insights puts the modeled acquisition cost of the six-product XRP ETF portfolio at about 1.71 USD per token (1.712 USD including the XRP sleeve of the Bitwise 10 Crypto Index Fund). Against the roughly 1.29 USD price displayed on Oct. 29, that implies holders are sitting on a gap of roughly 24.4% to 24.6% — a paper loss of historic proportions for a fund channel that only launched months ago.

Only a sliver of exposure has left the funds

Despite that underwater position, the outflows have been remarkably small. XRP Insights’ flow series recorded a net reduction of only about 2.96 million XRP across Oct. 26–28. Comparing matched Oct. 23 and Oct. 28 balances for the same group of funds puts the total decline at roughly 0.26% — meaning more than 99.7% of the accumulated exposure is still in place.

Not every session was negative, either. Oct. 28 actually added about 174,140 XRP back into the funds, partially reversing the earlier dip. In the tracker’s fund-level history, Bitwise’s fund moved from about 416.61 million XRP on Oct. 23 to 413.82 million on Oct. 26, then held flat through Oct. 28. Franklin Templeton and 21Shares were flat across all three sessions.

In its Oct. 28 snapshot, XRP Insights estimated approximately 1.17 billion XRP of exposure across six products, rising to about 1.19 billion when the Bitwise index fund sleeve is included. REX Osprey’s XRP Fund alone held 19,885,382 direct XRP on Oct. 28, alongside 362,750 CoinShares Physical XRP securities — those securities are not individual tokens, which is why a tracker’s XRP-equivalent exposure can exceed the coins directly held by the US fund.

What the 1.71 USD estimate actually measures

Investors should read the cost-basis figure carefully. The model starts with each fund’s first holdings observation in the dataset, beginning in December 2025, values that opening balance at the day’s XRP price, then adds subsequent increases at each day’s reference price and removes decreases at the portfolio’s average cost. Funds that already existed when the dataset began enter at the starting observation’s price, and some historical holdings were themselves reconstructed.

Those assumptions matter. Replacing the tracker’s stored daily prices with prices implied by fund net asset values raises the combined estimate to 1.7458 USD — about 2% higher, which would put XRP roughly 26% below the alternative figure. And because the model follows fund inventories rather than shareholder trades, an investor may have bought fund shares long after the underlying XRP entered the portfolio, at a different price and at a premium or discount to net asset value.

In other words, the estimates cannot prove that ETF shareholders are collectively down 25%, and 1.71 USD is neither a price floor nor a contractual liquidation threshold. What they do show is the scale of conviction: a large, expensive inventory of XRP that holders have declined to liquidate even as the token trades well below where most of it entered the funds.

Why creations, not price, will tell the real story

For everyday altcoin investors, the number to watch is not the dollar value of fund assets — XRP’s price can change portfolio value without a single coin leaving. The stronger signal is whether holdings and shares outstanding resume sustained growth across several issuers on matching observation dates.

Bitwise’s prospectus describes 10,000-share baskets handled by authorized participants. A cash creation can require the fund to buy XRP in the market, while an in-kind creation simply delivers existing tokens to the fund — which does not prove a spot-market purchase. That distinction is why creation records matter for interpreting demand.

The warning signs would be equally clear: persistent reductions across multiple funds, falling share counts, and visible redemption activity would chip away at the picture of a largely retained portfolio. Through Oct. 28, the measured reduction was small and concentrated, and the final session was positive.

The setup for XRP heading into year-end

The episode comes after an inflow streak that ended in mid-October, according to CryptoSlate’s earlier reporting, and reports that the ETF complex had grown to roughly 1.7 billion USD in holdings while taking in only about 4 million USD of fresh money in a week. That combination — a big installed base but slowing new demand — leaves XRP in an unusual spot: heavy institutional-style exposure with weak marginal buying, and a holder base apparently willing to wait out a 25% drawdown rather than crystallize it.

If the funds’ holdings keep holding, the sell pressure many traders feared from underwater ETF bags may simply never arrive. If the reduction broadens, the story changes quickly. Either way, the next round of settled issuer observations — not the daily price tape — will settle the argument.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or trading advice. Cryptocurrency markets are volatile, and readers should do their own research before making any investment decisions.