Kaiko reports that the trading volume of XRP has increased dramatically since November.
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 decision, which clarified XRP as not a securities when sold on exchanges paved its way to return to the mainstream trading platforms. Investor interest was rekindled by this ruling.
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. BTC is the only cryptocurrency with a liquidity ranking that matches its market cap.
ETF Speculation
This report attributed the surge in activity partly to speculation over the possible approval of a spot XRP Exchange-Traded Fund (ETF) with asset managers lining themselves up to launch such products.
This week the SEC officially commenced its work. You can also read about the importance of this in our article. XRP ETF submissions will trigger a 240 day review period before a decision is made.
According to Bloomberg analysts Eric Balchunas and James Seyffart, the odds of approval for a spot XRP ETF in the US There are 66%, with room for an increase if the new SEC leadership extinguishes the lawsuits in which it’s labeled a security.
As the deadline approaches, market participants anticipate increased volatility due to the precedent Ethereum established in May 2024. The SEC approved Ethereum spot ETFs, which led to a surge in ETH prices and trading volume.
If XRP followed a similar trend, it could see its trading revenues continue to grow, bolstering its increasing presence on the cryptocurrency market.
XRP’s dominance in trading may continue in the short term as institutional interest grows and there is regulatory clarity in the US. This could influence the future of digital assets investment strategies.
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