XRP exchange-traded funds’ $1.2 billion inflows might be astonishing to some, but they still need to prove one critical thing.

Matt Hougan, chief investment officer at Bitwise, told DL News that XRP ETF inflows have “exceeded my expectations, particularly given the direction of the market.”

XRP trades at $2.15, up about 17% in the past fortnight.

Since launching in November, XRP ETFs have attracted over $1.2 billion with net inflows recorded every day excepting one, according to SoSoValue data. That sharply outpaces Bitcoin ETFs, which saw $2.4 billion in outflows over the same period, and runs counter to the crypto market in general, which has slumped since Bitcoin’s October price record.

But Hougan says the real test is just beginning.

“XRP is still figuring out its product-market fit,” Hougan told DL News. “How it executes in 2026 will determine whether this becomes one of the most successful ETF launches in the market, or whether that demand fizzles out.”

Unlike Ethereum and Solana, which found product-market fit through stablecoins and DeFi, XRP still lacks a killer use case beyond cross-border payments. But if the Clarity Act passes and Ripple executes on real-world adoption in 2026, XRP could sustain momentum.

If not, ETF demand could evaporate.

Others are more sceptical than Hougan, however.

“Without builders, expect minimal growth for XRP,” Brian Huang, co-founder of investment platform Glider, previously told DL News.

The product-market fit problem

While Ethereum and Solana have already made it clear that they have found product-market fit, XRP faces a daunting challenge: proving utility.

“Ethereum and Solana go to new all-time highs because they found product-market fit through stablecoins,” Hougan said.

The value of stablecoins on Solana has ballooned by more than any other crypto network over the past year.

Meanwhile, XRP is still searching for its defining use-case. Ripple has positioned XRP as a bridge currency for cross-border payments, but widespread institutional adoption remains elusive.

The Clarity Act could help by establishing clear regulatory frameworks — something that Ripple has been lobbying for years.

But regulatory clarity alone won’t be enough. Ripple needs to demonstrate banks and payment providers are actually using XRP at scale.

Demand isn’t exhausted

Hougan said XRP ETF demand hasn’t run its course.

“I don’t think that demand is exhausted,” Hougan told DL News.

But a strong start doesn’t guarantee sustained success. Hougan emphasised XRP’s future depends entirely on execution.

“This is execution-based risk,” Hougan said. “If it executes, it will be rewarded.”

Idiosyncratic risk

Hougan views XRP’s uncertainty as what makes it compelling.

“There’s so much idiosyncratic risk,” Hougan said. “That makes it really attractive from an investment perspective.”

Unlike Bitcoin, which trades on macro factors, XRP’s price is driven almost entirely by Ripple’s business execution. That creates asymmetric upside if Ripple delivers.

In November, Ripple tripled its valuation to $40 billion following a $500 million funding round including Citadel Securities and Galaxy Digital. Ripple also announced a partnership with Mastercard and Gemini for stablecoin payments.