XRP trading booms on US exchanges as ETF speculation heats up

The demand for XRP exceeds that of other crypto on US-based exchanges, with trading volumes surging significantly since November, according to a recent Kaiko report.

The report highlighted XRP growth in trading activity using Coinbase’s latest earnings report. For the first time in recent history, XRP contributed more to the exchange’s trading-based revenue than Ethereum (ETH).

XRP accounted for 14% of Coinbase’s total trading revenue in the fourth quarter, reflecting a broader trend across US-based exchanges. 

The surge in XRP’s trading volume comes after its re-listing on major US exchanges last year after Ripple Labs secured a partial court victory against the US Securities and Exchange Commission (SEC). 

The ruling, which clarified that XRP was not a security when sold on exchanges, paved the way for its return to mainstream trading platforms, fueling renewed investor interest.

According to Kaiko’s liquidity ranking, XRP is third behind Bitcoin (BTC) and ETH. 

The liquidity ranking calculates a crypto’s market cap compared to its liquidity in trading venues. Only BTC, ETH, XRP, and Solana (SOL) have liquidity that closely matches their respective market caps.

Speculation with ETF

The report partially attributed the spike in activity to speculation about the potential approval of a spot XRP exchange-traded fund (ETF), with asset managers lining up to introduce such products.

Last week, the SEC formally acknowledged XRP ETF filings, setting off a 240-day review window before a final decision.

According to Bloomberg analysts Eric Balchunas and James Seyffart, the odds of approval for a spot XRP ETF in the US are 65%, with room for an increase if the new SEC leadership extinguishes the lawsuits in which it’s labeled a security.

Market participants expect heightened volatility as the deadline nears, given the precedent set by Ethereum in May 2024. At that time, ETH trading volumes and prices surged after the SEC unexpectedly approved spot Ethereum ETFs.

Should XRP follow a similar trajectory, its trading-related revenues could continue to climb, reinforcing its growing presence in the crypto market. 

With institutional interest gaining momentum and regulatory clarity on the horizon in the US, XRP’s trading dominance may persist in the near term, potentially shaping the next phase of digital asset investment strategies.

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