The demand for XRP has been soaring on US-based exchanges, surpassing that of other cryptocurrencies, according to a recent report by Kaiko. Since November, trading volumes for XRP have been on the rise, with the digital asset making significant contributions to the revenue of major exchanges like Coinbase.
In the fourth quarter, XRP accounted for 14% of Coinbase’s total trading revenue, outpacing Ethereum for the first time in recent history. This trend is not limited to Coinbase, as other US-based exchanges have also seen a surge in XRP trading activity.
The resurgence of interest in XRP can be attributed to its re-listing on major exchanges following a legal battle with the US Securities and Exchange Commission (SEC). A court ruling clarified that XRP was not a security when sold on exchanges, leading to its return to mainstream trading platforms and sparking renewed investor interest.
According to Kaiko’s liquidity ranking, XRP is currently the third most liquid cryptocurrency, behind Bitcoin and Ethereum. This ranking measures a cryptocurrency’s market cap relative to its liquidity in trading venues, and only a few digital assets like XRP closely match their market caps in terms of liquidity.
One factor driving the recent surge in XRP trading activity is speculation about the potential approval of a spot XRP exchange-traded fund (ETF). The SEC recently acknowledged XRP ETF filings, initiating a 240-day review period before a final decision is made.
Analysts from Bloomberg believe that there is a 65% chance of approval for a spot XRP ETF in the US, with the possibility of an increase if the new leadership at the SEC resolves the ongoing legal disputes surrounding XRP’s classification as a security. This speculation has led to increased volatility in the market as the deadline for the ETF decision approaches.
If XRP were to follow a similar path as Ethereum, which saw a significant increase in trading volumes and prices after the approval of spot Ethereum ETFs, its trading-related revenues could continue to climb. Institutional interest in XRP is also on the rise, and regulatory clarity in the US could further solidify its position in the crypto market.
Overall, with the potential for a spot XRP ETF approval and growing institutional interest, XRP’s dominance in trading volumes on US-based exchanges is likely to persist in the near future. This could have a significant impact on the digital asset investment landscape, shaping the strategies of investors and traders alike.