Flare’s new FXRP/RLUSD lending market saw $1 million borrowed within hours of its launch, while a reported $3.58 million outflow from the Bitwise XRP ETF drew market attention. Available records do not confirm a bearish XRP trade by Bitwise.
FXRP Lending Demand Quickly Absorbs Initial RLUSD
FXRP became the first XRP-based collateral approved for Sentora’s institutionally curated RLUSD vault on Ethereum mainnet. The wider vault holds about $280 million in deposits. Flare launched the separate FXRP/RLUSD market with a 5 million RLUSD supply cap. It initially supplied 1 million RLUSD, which borrowers fully used within hours.
Risk clearance has since approved an expansion of the supply cap to roughly 9 million RLUSD, providing additional capacity if demand continues. Around 150 million FXRP currently circulates across the market. About 34.5 million FXRP already serves as collateral on Mystic Finance, Flare’s native Morpho deployment.
The Ethereum market operates separately through Sentora. Flare’s FTSOv2 oracle supplies FXRP pricing on Flare, while Sentora uses ChainlinkOracleV2 infrastructure on Ethereum. This structure allows XRP holders to access RLUSD liquidity without first selling their FXRP collateral.
Bitwise XRP ETF Outflow Reflects Redemption Activity
Separately, social media accounts reported a $3.58 million outflow from the Bitwise XRP ETF on August 6. The flow reportedly occurred during the August 5 session. Available data supports a net redemption rather than a confirmed directional trade by Bitwise. The trust holds XRP on behalf of shareholders.
Authorized financial firms handle share creations and redemptions under the fund’s operating structure. Bitwise Investment Advisers sponsors the product. The ETF creates and redeems shares in blocks of 10,000 through authorized participants. Therefore, a net outflow means redemptions exceeded new share creation.
Does that redemption prove Bitwise expects XRP prices to fall? Public records currently provide no evidence supporting that interpretation. A redemption may result from portfolio rebalancing, liquidity needs, arbitrage, or an investor’s risk decision.
Fund Records Put Reported XRP Outflow in Context
Bitwise’s official page showed 293.93 million XRP in the trust on August 4. Those assets carried a value of about $314.39 million. The fund also reported 26.31 million shares outstanding and net assets near $314.37 million. Its net asset value stood at $11.95 per share.
However, the holdings page had not yet advanced to August 5 when checked. As a result, it could not confirm the reported $3.58 million reduction. The fund’s first-quarter filing also recorded earlier redemptions. It sold about 9.73 million XRP for share redemptions and transferred another 2.69 million XRP through in-kind redemptions.
Despite those transactions, XRP holdings rose from 131.22 million at year-end to 194.90 million by March 31. Holdings later reached 293.93 million by August 4. XRP traded near $1.07 on August 6, according to supplied market data. Its 24-hour range stood between $1.05 and $1.08.
The token remained about 70% below its July 2025 record of $3.65. Its market capitalization stood near $67 billion. Bitwise’s fund showed a year-to-date NAV return of negative 41.70% through July 30. Its NAV fell 0.76% on August 4.
The next confirmation will come from changes in daily holdings, shares outstanding, and net assets. Later SEC filings can also separate cash sales from in-kind XRP redemptions.
Conclusion
Flare’s FXRP/RLUSD market recorded rapid borrowing demand, while Bitwise’s reported XRP ETF outflow reflected a redemption rather than a proven bearish trade. Updated Bitwise holdings and later SEC filings should provide clearer evidence about how the August 5 redemption settled.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies are risky assets. Always do your own research before investing.
Leave a Reply