Why do market makers hold XRP, and are they betting on its price?

The full answer

A market maker is a firm that stands ready to buy and to sell, quoting both prices at once. For XRP that means holding XRP and the currency it trades against. An SEC filing for the Bitwise XRP ETF describes XRP’s over-the-counter market as “largely institutional,” with participants that include “firms that offer two-sided liquidity for XRP,” proprietary trading firms and “entities with sizeable XRP holdings.”[1] On the XRP Ledger’s own exchange the same job is often done by software. Validator operator Vet described bots on the XRP/RLUSD pair that cancel and replace their offers to keep up with prices.[2]

The stock a market maker holds is working inventory. When a customer buys, the firm’s XRP goes down and its dollars go up; when a customer sells, the reverse. The firm earns the gap between its buying and selling prices. Deeper inventory lets it quote larger sizes and tighter prices, which is why depth and market-maker inventory are closely tied, as set out on why liquidity depth matters for XRP as a bridge.

How can a market maker hold XRP without betting on its price?

By hedging. The Bitwise filing says ETF authorized participants and market makers “will generally want to hedge their exposure” when shares are created or redeemed, and warns that “insufficient XRP liquidity,” “extreme volatility” or “wide spreads between prices quoted on different XRP trading platforms” can stop them.[1]

Futures are one tool. CME Group’s XRP futures come in a micro contract of 2,500 XRP and a larger contract of 50,000 XRP.[3] The first trade, on May 18, 2025, was cleared by Hidden Road.[4] A firm that holds XRP and sells an equal amount of futures gains on one side what it loses on the other. What is left is roughly the difference between the spot and futures prices, plus costs.

A published example shows the pattern, though from a fund rather than a market maker. Bitwise’s Crypto Carry Fund listed 16,331,438 XRP in custody and a short Coinbase October 2026 XRP future of 16,150,000 XRP as of September 21, 2026.[5] The short covered about 99% of the XRP. Scaled up, the same idea is a $100 million XRP holding with an equal short futures position, which is close to price-neutral. The same notes compare it with a foreign-exchange dealer’s book; that comparison is untested here, and no source measures how XRP dealers actually run theirs.

Futures positions can shrink quickly. CoinDesk, citing CoinGlass, reported that open XRP futures across venues fell from 2.77 billion to 2.34 billion XRP between August 17 and 31, 2026.[6] How the hedging tools work in detail is on how to hedge XRP price risk.

Which firms make markets in XRP?

The Bitwise filing describes the kinds of firms but names none.[1] The SEC’s 2020 complaint against Ripple refers to one “global digital asset trading firm” it calls “the Market Maker,” through which Ripple conducted most of its sales on trading platforms, but does not name it.[7] In an October 15, 2024 release naming RLUSD exchange partners, Ripple said “Leading market makers, such as B2C2 and Keyrock, will support the liquidity of RLUSD.”[8] That release names them for RLUSD, not for XRP. The 2020 SEC complaint and the Bitwise filing refer only to “certain market makers” or to market makers generally and do not name them. No named XRP market makers appear in those sources, so who they are remains an open question.

Does Ripple pay or lend XRP to market makers, and on what terms?

It has paid them in the past, according to the SEC’s allegations. The 2020 complaint says Ripple “paid XRP to both the money transmitting businesses and certain market makers” that supported its On-Demand Liquidity (ODL) product. From about December 2018 to July 2020, it alleged, Ripple issued at least 324 million XRP, about $67 million at the time, as “fees, rebates, and incentives,” which recipients typically sold the same day.[7] The complaint also alleged Ripple paid some market makers incentives if its sales “reached certain trading volume levels.”[7] Earlier, on March 31, 2017, the exchange Bitstamp said its XRP market maker incentive had reached its “budget limit provided by Ripple.”[9] These were allegations, not findings. The court ruled on July 13, 2023 that Ripple’s programmatic exchange sales were not sales of investment contracts.[10] How those sales differed from Ripple’s direct sales is on why Ripple’s institutional XRP sales were treated differently.

Lending is less clear. In October 2020 Ripple launched a Line of Credit that let ODL customers “purchase XRP from Ripple on credit,” paying “one fee on the amount borrowed.”[11] Ripple limited it to “eligible institutional RippleNet customers.”[11] Ripple still listed “lines of credit” among its services in November 2022.[12] Separately, the SEC complaint alleged that Ripple paid at least 324 million XRP, valued at about $67 million at the time, from about December 2018 to July 2020 as fees, rebates and incentives to money transmitting businesses and certain market makers associated with ODL.[5] Bitstamp reported on March 31, 2017 that its XRP market maker incentive programme had reached its budget limit provided by Ripple and was completed. The newest plan comes from outside Ripple: Evernorth said on January 29, 2026 that it intends to use the upcoming XRP Lending Protocol (XLS-66) as a core pillar of its strategy, depositing XRP into Single-Asset Vaults so institutional borrowers can draw XRP loans for purposes “such as market making or collateral management.”[13] How that lending would work is on whether market makers need to own all the XRP they provide.

Do market makers hold XRP because they expect it to rise?

A hedged market maker does not need to. Its profit comes from spreads and from the gap between spot and futures prices, not from XRP going up. An unhedged one is betting, whether it means to or not. As of September 29, 2026, no source shows how much of market makers’ XRP is hedged.

The hedge also moves the price bet rather than removing it. Someone takes the other side of every short future, so the market as a whole still carries the XRP price risk. That is why a large market-maker inventory is not the same as buyers who expect XRP to rise. What does move the price is on what drives XRP’s price, and the case that hedged holding is a yield trade rather than support for XRP is on the hedged XRP carry trade.