Why Institutional Investors Keep Trusting XRP

XRP’s long-standing presence in the cryptocurrency market and its ties to traditional financial functions make it an attractive option for institutional investors, according to Matt Hougan, the chief investment officer of Bitwise. In a video shared on September 28, Hougan highlighted XRP’s appeal, noting its established history and recognizable applications in financial services.

Hougan described XRP as one of the ‘Mount Rushmore assets in crypto,’ emphasizing its durability and the confidence it instills in financial advisors. While advisors may question the longevity of newer investments, XRP’s track record provides reassurance that it will remain a relevant asset. However, Hougan clarified that confidence in XRP’s staying power does not necessarily translate to expectations of price appreciation.

The appeal of XRP is further strengthened by its practical uses in cross-currency transfers and liquidity, which align with financial services that advisors already understand. The XRP Ledger (XRPL) has seen growth in stablecoin supply and tokenization, even as the token’s price has fluctuated. Additionally, Hougan mentioned Ripple’s efforts to obtain a bank charter, a development that advisors can contextualize within the broader financial landscape.

Despite record inflows into XRP exchange-traded funds (ETFs) during the third quarter, reaching $1.77 billion by September 25, assets under management declined afterward. By October 2, the total had dropped to approximately $1.658 billion, with a $3.28 million outflow entirely from Bitwise. The Bitwise XRP ETF, trading on NYSE Arca, has an annual expense ratio of 0.34% and held about $606.47 million in net assets as of October 1.