Canary Capital: XRP ETFs are drawing broader, more institutional demand than many expect
Canary Capital CEO Steven McClurg says the investor mix piling into XRP ETFs is wider and more institutional than the market often assumes. In a Wealthion podcast with CoinFund President Chris Perkins, McClurg said interest is coming not only from retail traders but also from pension funds and insurance allocators that prefer a regulated, brokerage-native ETF wrapper over the operational headaches of holding spot crypto.
“Usually when you launch a new ETF… retail adoption happens first,” McClurg said, noting early retail activity in the first week or two. But that was quickly followed by inquiries “from pension funds and insurance companies globally,” he added — the very allocators Canary targets as part of its ETF distribution strategy. McClurg described XRP as an easy-to-understand asset for global capital markets: “It’s the rails for the financial system,” which helps explain institutional curiosity.
On flows, McClurg estimated retail accounts for roughly 20–30% of visible brokerage activity, with the remainder dominated by faster, trading-oriented capital. “It’s probably about 70% — I don’t want to call it institutional, but it’s probably 70% fast money at the moment,” he said. Still, he believes the longer-term equilibrium for products like an XRP ETF will be the advisor-and-allocator channels already embedded in the ETF ecosystem: “ETFs are going to be probably primarily used by financial advisors… Because they’re simple, they’re clean.”
A key selling point for these allocators is cost and convenience. McClurg contrasted ETF access with retail exchange trading, where fees and spreads can be hefty. “Most retail is trading crypto on an exchange and they’re getting charged massive fees… We’re talking $100 a trade. Plus the spread,” he said. By contrast, ETFs can compress friction—tight spreads and a single management fee—making them easier to hold and explain in traditional portfolios.
McClurg also highlighted the role of basis — the spot/futures spread — in driving ETF demand. When the basis trade is attractive, it can pull flows into spot ETFs and create incremental buying pressure in the underlying asset. He argued that this dynamic has supported XRP since launch and has at times aligned with inflows in other crypto ETFs. “We’ve benefited from launching XRP… because there’s a great basis trade there,” he said, adding that the product has seen consistent net buying even as broader markets softened.
He noted another strong symptom of demand: U.S. spot XRP ETFs have not recorded a single day of outflows since launch, he said. At press time, XRP was trading at $1.92.
The takeaways for investors: retail interest remains meaningful, but the quieter, larger pools of capital — pensions, insurers, and advisor channels — are increasingly eyeing regulated ETF wrappers for crypto exposure. Basis-driven flows and the relative operational simplicity of ETFs appear to be key factors shaping that shift.
Read more AI-generated news on: undefined/news
