XRP Futures from CME reach $9 billion - Could the approval of a spot ETF halt a 23% market downturn?

In a recent shift in the cryptocurrency market, Chainlink (LINK) has been outperforming Ripple (XRP) after logging 75% gains over three weeks, a significant feat in the third quarter. This outperformance comes after XRP had dominated for most of the past two years.

The surge in Chainlink's performance raises the question of whether it can outperform XRP in the near term. Meanwhile, Ripple has seen a cool-off, with its value dropping 23%, from $3.6 to $2.8, following a strong bid that defended the $2.8 mark during the Q3 pullback. Whether this mark will hold again remains uncertain.

The downtrend in overall demand for XRP Futures has been evident over the past few days, mirroring the price decline. However, there are signs of hope for a potential XRP recovery. Institutional interest in Ripple has surged to an all-time high, with significant investments being made.

A $200 million institutional investment through in-kind contributions led by Digital Wealth Partners has been made in Ripple’s XRP, fueled by speculation around an XRP ETF approval. Additionally, large investors, often referred to as "whales," have acquired over $60 million worth of XRP tokens recently, including a notable purchase of 20 million XRP from the Upbit exchange.

Two key whale cohorts holding 10 million to 1 billion XRP tokens have eased their offloading, a trend seen in July and early August. This easing of the sell-off by these large investors has raised hope for a potential XRP recovery if they begin bidding strongly again.

The Chicago Mercantile Exchange (CME) reported a record Open Interest of nearly 12 million XRP, equivalent to a cumulative value of $9.02 billion in the XRP Futures market. This record demand was described as a "clear sign of growing conviction in the market" by the exchange.

Despite this, compared to other exchanges, CME ranked fourth in terms of XRP Futures demand, behind Bybit, Binance, and Bitget.

Interestingly, a key Chainlink official claimed that Swift was working with the Chainlink network instead of XRP, a statement that could potentially influence the market dynamics between the two cryptocurrencies.

Market watchers view the CME Futures growth as a vote of confidence and a likely positive outcome for potential XRP ETF products. The record demand for XRP Futures, despite the recent price decline, underscores the belief that investors are betting on a future recovery for Ripple.

In conclusion, while Chainlink has outperformed Ripple in Q3, the future of both cryptocurrencies remains uncertain. The market dynamics are influenced by various factors, including institutional interest, whale activity, and potential ETF approvals. As always, it's essential to approach investments with caution and do thorough research.