XRP ETF: Canary Capital CEO Predicts $10B Inflows, Shocks Wall Street

In a recent interview published on October 4, Steven McClurg, the astute co-founder and Chief Investment Officer (CIO) of Canary Capital, offered a significantly bullish forecast for a potential US spot XRP exchange-traded fund (ETF). His commentary not only painted an aggressive picture for XRP's market entry but also delineated the broader framework of a cryptocurrency ETF landscape that he anticipates will gravitate towards a select group of large-cap digital assets.

A Resounding Forecast: Spot XRP ETFs to Make Waves

During his conversation with Paul Barron, McClurg not only reaffirmed but substantially elevated his earlier projections regarding the initial demand for an XRP ETF. He now posits that first-month inflows could conceivably reach an impressive $10 billion. This revised figure notably doubles his previous "bearish" estimate of $5 billion, underscoring a growing conviction in XRP's market potential. When pressed on the realism of his initial $5 billion estimate, McClurg remarked, “I may have changed my mind. I may have been a little bearish. I’m gonna hold to that number because… if it’s $10 billion, then I’m still right.”

Furthermore, McClurg emphasized the likelihood of an exceptionally strong inaugural day for an XRP ETF. He projected, “If it was a billion in one day, I think XRP does two or three billion day one.” To provide perspective, he recalled that the pioneering US Bitcoin futures ETF garnered "over a billion dollars in inflows" on its launch day, marking it as one of the most substantial ETF debuts in history. This historical context highlights the significant scale of McClurg's expectations for XRP.

The Evolving Landscape of Crypto ETFs

The Canary Capital executive conceptualized the impending influx of crypto ETFs as extensive yet inherently bounded. Contrary to some market observers who envision dozens or even hundreds of listed products spanning various digital assets, McClurg stressed the limiting factors of "generic listing standards" and authentic market demand. He indicated, “There’s only about 14 to 15 assets that are going to qualify under the generic listing standards currently and I think maybe another five to 10 after that.” He drew an insightful parallel to the precious-metals sector, where only a handful of commodities consistently attract sustainable ETF interest. “I don’t think that more than, say, 25 are going to be relevant,” he concluded, suggesting a future market characterized by concentration.

McClurg anticipates that this asset concentration will mirror the patterns observed in existing spot Bitcoin and Ethereum ETFs. When questioned about the potential dominance of basket funds over single-asset funds, he asserted that certain large-cap cryptocurrencies would command individual attention. “Things like probably Bitcoin, Ethereum, XRP and Solana will—each one of those will probably have more assets than any one basket. But after those four I think baskets are the next.” He also confirmed Canary Capital's ongoing development of an "American-made" crypto index, hinting at a recent filing, and, while refraining from disclosing specific weightings before its official publication, acknowledged that XRP would undeniably be a component.

Navigating Regulatory Hurdles and Delays

The discourse frequently revisited the critical themes of regulatory alignment and timing, particularly against the backdrop of the federal government shutdown that had commenced just prior to the interview. McClurg highlighted that the shutdown had already led to the suspension of "non-essential" workstreams at the Securities and Exchange Commission (SEC), including the review processes for S-1 and S-3 registration statements. He issued a cautionary note: “I expect there to be a long delay,” countering speculative assertions that Solana ETFs could launch imminently while SEC staff remained furloughed. Nevertheless, he expressed a degree of optimism, expecting the majority of pending crypto ETFs to gain approval by the end of the year, “as long as it’s not a very long shutdown.”

The Core Investment Thesis: Why XRP?

The investment rationale for XRP, as articulated by McClurg, extends beyond the mere establishment of ETF infrastructure to its inherent utility, particularly within the realm of cross-border payments. “What I like about XRP is what they’re attempting to build… for financial rails, including cross-border payments,” he stated, recounting his personal journey into blockchain technology, which was motivated by the challenges of remittances. He characterized current remittance fees as "ridiculously high," adding, “I’m for any technology that eliminates a lot of that… that’s kind of a bit of a secret weapon… for XRP in comparison to some other ETF offerings.”

Addressing recent organizational shifts at Ripple, McClurg largely dismissed the market impact of David Schwartz’s transition from CTO to roles primarily focused on the XRPL. “It really doesn’t [change my view],” he affirmed. “He’s still involved. He’s still on the board… I actually think this is a positive,” suggesting that such a move could foster the emergence of fresh leadership following an extended and often contentious period for the company.

Macroeconomic Undercurrents and Market Cycles

On the broader topics of macroeconomics and market cycles, McClurg presented a measured perspective. He foresees the persistence of the traditional four-year crypto cycle but expects it to become progressively “more and more muted” as market capitalizations expand, attributing this to “the law of large numbers.” His year-end Bitcoin price target remains $140,000, despite more ambitious forecasts elsewhere. “That sounds really low,” he conceded, “but I just don’t expect… it’s going to take a lot more work to move that number up.”

He anticipates a plausible continuation of the rally into the first and second quarters of the next year, contingent upon prevailing liquidity conditions and interest rate policies. A potential replacement of the Fed chair in May could trigger an anticipatory rally, driven by expectations of deeper rate cuts, followed by a "sell-the-news" reaction once such cuts are implemented. Concurrently, he highlighted signs of weakening US consumer demand, citing early indicators from restaurant, airline, and hotel bookings, as a burgeoning headwind for risk assets if this trend continues. At the time of press, XRP was trading at $2.97.