XRP Catalysts: Everything May Be Priced In Already

Summary XRP’s recent outperformance is driven by the SEC dropping an appeal and high ETF application interest, signaling strong investment demand. Despite positive chain usage data, including record-high DAAs and transaction trends, XRP’s market value appears inflated relative to its realized value. The MVRV ratio suggests XRP may be overvalued, with historical peaks indicating potential price tops, warranting caution. I reiterate a ‘hold’ rating on XRP, as current prices may reflect excessive optimism ahead of potential ETF approvals. Back in December, I covered the XRP ( XRP-USD ) token for Seeking Alpha and reiterated a ‘hold.’ I’ve covered XRP a few times for SA in the past and have always listed the coin as a ‘hold.’ XRP has been around for a long time relative to the broader digital asset market. The token is utilized for transaction payments on the XRP Ledger which is developed by Ripple Labs. Data by YCharts Though XRP is down about 20% since my December article, it is one of the best performing assets in the crypto space year to date and is specifically beating the returns for native tokens on leading smart contract blockchains. In this update, we’ll explore what is likely driving this outperformance and get into chain usage to assess whether or not XRP is moving more on hype or on utility. Catalysts: The SEC’s White Flag & ETF Expectations The biggest reason XRP has been a major outperformer in 2025 is likely due to the SEC dropping its appeal against Ripple Labs in March – essentially clearing the path for XRP Ledger development and adoption from a market that has been highly cautious the token due to regulatory concerns for years. Ripple Labs subsequently purchased a prime brokerage firm for $1.25 billion that could potentially use Ripple’s dollar-stablecoin product Ripple USD (RLUSD-USD) as collateral. Given the clearly improving regulatory setup for XRP, it’s perhaps no surprise that XRP is now a coveted spot-ETF product from TradFi asset managers: Applications By Asset (Kaiko Research, SEC, EDGAR) According to tracking by Kaiko Reserach, there are already 10 ETF applications for XRP-based products – this puts XRP as far and away the leader in pending applications and more than double the next major asset. The investment demand story is telling as well: Investment Flows (m$) MTD Flows YTD Flows AUM Bitcoin ( BTC-USD ) -$890 $545 $112,961 Ethereum ( ETH-USD ) -$89 $241 $7,844 Multi-asset $2 -$143 $5,898 Solana ( SOL-USD ) -$6 $79 $1,087 XRP $2 $176 $883 Source: Coinshares, Bloomberg, as of April 12, 2025 Capital allocators are bullish XRP judging by the $176 million in year to date positive net flows as of April 12th – 20% of the total investment AUM for XRP has come from this year alone. Solana’s YTD net flow of total AUM is just 7% by comparison. I believe this signal is clear; the investment community believes it has been underweight XRP and is now making up that ground before spot ETFs hit the market. For instance, Standard Chartered has a $12.50 price target for XRP and sees ETF approval happening next quarter. The firm believes XRP will eventually overtake Ethereum by market capitalization. Should it, though? Network Data/Stablecoin Supply In my view, XRP’s market capitalization relative to ETH is already quiet telling. At a $123.3 billion in total market cap, XRP is only behind ETH by about $73 billion and is almost worth as much as Solana and Binance ( BNB-USD ) combined. From a stablecoin supply standpoint, there is $94 million RLUSD in circulation. This puts Ripple as the 29th ranked stablecoin chain and well behind market leader Ethereum – which has over $122 billion in stables. On this alone, it’s difficult to argue XRP should have a larger valuation than ETH. But admittedly, there are several positive signs for XRP in the usage data. XRP, 30 Day Fees (CoinMetrics) 30 Day Fees recently hit an all-time high in February. Bear in mind, XRP is a low-cost chain and the fees paid to the network are very low comparatively to other networks. Usage of the chain is also spiking when measured by Daily Active Address, or DAAs: XRP, 30 Day DAAs (CoinMetrics) The chart above shows 30 day DAAs peaking at 246.5k in March. That’s an all time high in the average and comes with a daily transaction trend that is also very promising: XRP, 30 Day Txs (CoinMetrics) The 30 day average transaction trend for XRP has been in an uptrend for over a decade. Not every public chain has a transaction trend that looks like this. I think this is a positive sign for XRP usage longer term, especially given the changing regulatory environment in the United States. The question ultimately comes down to what should XRP be worth? One way we can look at valuation is through the market value to realized value, or MVRV: XRP, 30 Day MVRV (CoinMetrics) The market value to realized value is high. At 1.7 MVRV ratio, XRP is quite a bit ‘overvalued’ relative to what has actually been paid for each token in existence. Furthermore, when the token hit a MVRV ratio of 2.3 in February it may have actually been a top signal if history is a guide. Back in May 2021, the 30 day average MVRV ratio hit 2.3 and that turned out to correlate perfectly with the top in the price of XRP during the last cycle. That certainly doesn’t mean it has to play out the same way again this cycle. But I think MVRV is a strong indicator and shouldn’t be ignored. XRP, Q4 YoY Change (Messari) If we look at the usage data from a quarterly vantage, we can get a better sense of where the year over year trends have been stronger. And perhaps to no real surprise, price is growing faster than DAAs or transactions. Again, a lot of this is likely due to capital allocators trying to get XRP exposure before ETFs hit the US market. Final Takeaways I’m still going to reiterate a ‘hold’ on XRP. For me, the chain usage data is actually pretty encouraging. We see transactions up over time, DAAs making highs, and even fees have noticeably increased in recent months. Still, price is well ahead of all of this action. It’s understandable to me that speculators would want to buy XRP before ETFs hit the market, but I do wonder if Ethereum serves as a warning sign with these types of hype-driven rallies. ETH ETFs hit the US market last summer and the token has fallen by over 50% since. Some of that is because ETH’s fundamental story faces challenges, but there was also a significant runup in the price of ETH in the months prior to the ETF approvals. I would be careful chasing XRP on ETF hopes. All too often, these types of catalysts are ‘buy the rumor, sell the news’ events. I think the MVRV ratio shows we may have already hit the peak in XRP for this cycle. And at a $123 billion market cap, XRP is pricing in a lot of network success that may not actually happen. Again, I think there are clearly positives here, but I think those bullish XRP may be able to wait for a better price.

Source: Seeking Alpha