Interest in Canary Capital’s new XRPC exchange-traded fund grew quickly after its debut, and commentary from market participants added another layer of focus.
Zach Rector, a prominent figure in the crypto space, has drawn attention to the potential impact of the fund on XRP’s supply, stating, “Canary will need to buy a lot more XRP after today!”
Canary will need to buy a lot more XRP after today! pic.twitter.com/qnQOh0A1Cg
— Zach Rector (@ZachRector7) November 13, 2025
Early Structure and Initial Backing
The ETF entered the market with a seed creation of 10,000 shares priced at $25 per share. The 250,000 dollars in seed capital funded the purchase of XRP, and the price of XRP sat around $2.39 to $2.5 at that point.
These figures brought initial backing of roughly 100,000 XRP for the entire fund, translating to about 10 XRP per share. This setup reflected the sponsor’s intention to maintain physical support for the product rather than synthetic or futures-based exposure.
The creation unit for the ETF includes 40,000 shares. Authorized participants follow the procedures set out in the fund’s documentation when they create or redeem units. Each creation or redemption requires the delivery of XRP proportional to the needed basket.
Supply Reduction and ETF Purchases
A physically backed ETF removes XRP from active markets whenever authorized participants create new units. While the tokens the fund holds remain in custody, the shares exist. So, increased creation activity increases demand for XRP, lowering the supply available for retail users and other purposes.
That reduction compounds an existing trend. Exchange wallets have shown lower XRP balances in recent months, and an ETF that sources actual tokens for collateral can accelerate that decline if inflows continue.
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When investors place capital into the ETF, market makers and authorized participants must secure the appropriate XRP basket before delivering creation units. In practice, this increases spot demand.
The purchases do not immediately reenter circulation, so the net effect tightens the circulating supply. A tighter circulating supply can change market dynamics because it reduces the amount of XRP available to meet buy-side pressure from other market participants.
Price Effects to Watch
Reduced exchange inventories and ETF-driven purchases can create conditions that support upward price movement if buying pressure persists. Price responds to both demand and available supply.
When supply decreases and demand remains steady or increases, buyers may need to bid higher to acquire tokens, which can raise market prices as exchanges run out of tokens. The magnitude of any price response depends on flow size, frequency of creations, and overall market liquidity.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are advised to conduct thorough research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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