XRP Surpassed Bitcoin and Ethereum: Reasons for the Rise

XRP has recorded an increase of 89% in the last year, outperforming major cryptocurrencies like Bitcoin and Ethereum. Despite the recent downturn in the crypto market, XRP has shown one of the strongest performances over the past 365 days. According to CoinDesk data, Bitcoin and the CoinDesk 20 index have only seen an increase of 3.6%, while Ethereum has remained flat at around 2%. XRP's high performance stands out clearly among the major coins.

In particular, the over 36% decline in large altcoins like Solana and Cardano has made XRP's relative strength even more pronounced. Additionally, the 78% drop in the meme coin index indicates a contraction in market risk appetite. However, XRP remains the only major token that has shown a positive performance both over the past 365 days and year-to-date, capturing the attention of investors.

The strong rise of XRP is not solely attributed to price movements. The resolution of Ripple's lawsuit with the U.S. Securities and Exchange Commission has eliminated long-standing uncertainty, making XRP a more accessible asset for institutional investors. Furthermore, the rollout of the XRPL EVM sidechain and the widespread use of Ripple's RLUSD stablecoin within the ecosystem are also boosting XRP's strength. The RLUSD reaching a market value of $1 billion within a year reflects the demand in this area.

Finally, Ripple’s deepening partnerships in the Middle East and its banking license application in the U.S. are other factors that are increasing institutional interest. Last week, the launch of Canary Capital's spot XRP ETF product in the U.S. marked a significant milestone. Bitwise CEO Hunter Horsley has stated that the demand for XRP ETFs among institutional investors will be very strong. According to him, there are over $100 trillion in assets within the traditional financial system, and their beginning to trade on-chain presents a significant opportunity for XRP.

However, XRP's superior performance also comes with high volatility. According to CoinDesk data, XRP's 365-day annualized volatility stands at 91%. In comparison, this figure is 44% for Bitcoin, with only the meme coin index and Cardano exhibiting higher volatility. Increased institutional interest and potential new ETF approvals may reduce XRP's price fluctuations over time. However, the current picture clearly indicates that XRP's strong performance carries high risk.