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Macro Liquidity Fuels XRP Rally, But Supply and Policy Uncertainties Loom

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XRP's price surge in late August and early September has been driven by macro liquidity and institutional demand, but structural supply and policy uncertainties may temper enthusiasm.

The U.S. Treasury's bond buyback program expansion triggered a broad risk-on sentiment across asset classes, with XRP benefiting disproportionately from the liquidity surge.

Institutional flows into spot XRP ETFs further amplified the rally, recording a record $110 million in net inflows for the week ending August 28.

However, Ripple's monthly escrow unlock on September 1 released 1 billion XRP from escrow, but typically only 200-400 million enter circulation. This supply influx may not be fully absorbed by institutional demand.

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