XRP Surpasses Bitcoin and Ethereum: Reasons for the Rise

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

Particularly, the value of major altcoins like Solana and Cardano has decreased by over 36% in a year, making XRP's relative strength more apparent. Additionally, the meme coin index has dropped by 78%, indicating a contraction in market risk appetite. However, XRP is attracting investor attention as the only major token that has shown positive performance both over the past 365 days and since the beginning of the year.

The strong rise of XRP is not solely attributed to price movements. The outcome 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. Additionally, the implementation of the XRPL EVM sidechain structure and the widespread use of Ripple’s RLUSD stablecoin within the ecosystem are enhancing XRP's strength. The RLUSD's achievement of a $1 billion market cap within a year further illustrates the demand in this sector.

Finally, Ripple's deepening partnerships in the Middle East and its banking license application in the U.S. are further factors that increase 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 stated that the demand for XRP ETFs among institutional investors would be very strong. According to him, there are more than $100 trillion in assets within the traditional financial system, and the initiation of transactions on-chain presents an important opportunity for XRP.

However, XRP's superior performance comes with high volatility. According to CoinDesk data, the annualized volatility of XRP over 365 days is 91%. In comparison, this rate is 44% for Bitcoin, while only the meme coin index and Cardano exhibit higher volatility. Increased institutional interest and potential new ETF approvals may reduce XRP’s price fluctuations over time. However, the current situation clearly indicates that XRP's strong performance carries a high risk.