The world of digital assets continues to evolve at a rapid pace, and few cryptocurrencies have drawn as much attention in 2025 as XRP, the fourth-largest cryptocurrency by market capitalization. As institutional and retail interest grows, Ripple’s recently released Q1 2025 XRP Markets Report offers a revealing snapshot of the asset’s performance—highlighting a stark divergence between booming spot market activity and declining on-chain usage.
This dual narrative underscores a critical shift: while investor confidence in XRP is surging, questions are emerging about the real-world utility of the XRP Ledger (XRPL). Let’s dive into the data, trends, and implications shaping XRP’s trajectory in 2025.
Surge in XRP Spot Trading Volume and Investor Interest
One of the most striking findings from Ripple’s Q1 report is the dramatic rise in spot trading volume for XRP. Throughout the first quarter of 2025, average daily spot volume held steady at $3.2 billion across major global exchanges. This figure reflects sustained demand and growing liquidity in the XRP market.
The momentum peaked in late January and early February, with daily volumes briefly soaring above $16 billion—a level not seen since the height of the 2018 bull run. Although volumes gradually cooled in March, the overall trend remains bullish.
👉 Discover how leading financial platforms are integrating digital assets like XRP.
Exchange dominance was led by Binance, which accounted for approximately 40% of total trading volume. Upbit followed with 15%, and Coinbase captured 12%, indicating strong support across both Asian and Western markets.
Equally significant is the growing preference for fiat-pegged trading pairs. The share of USD and USD-pegged stablecoin volume in XRP trades increased from 25% in Q4 2024 to 29% in Q1 2025, signaling stronger adoption among traditional investors seeking regulated entry points.
XRP’s price responded accordingly, climbing to a high of $3.40—its peak since January 2018—and outperforming both Bitcoin (BTC) and Ethereum (ETH) during key periods of the quarter. This price surge coincided with broader positive sentiment in the crypto market, fueled by regulatory clarity and institutional momentum.
Institutional Inflows and Financial Product Growth
Beyond spot trading, XRP-based financial products saw robust inflows. Year-to-date investment in XRP-linked funds reached $214 million, nearly matching inflows into global Ethereum investment vehicles. This surge reflects growing institutional appetite for diversified digital asset exposure.
Several major developments have contributed to this confidence:
- The SEC officially dropped its appeal in the long-running lawsuit against Ripple, removing a major regulatory overhang.
- Franklin Templeton filed for an XRP ETF in the U.S., with a decision expected by June 2025.
- The CME Group launched XRP futures, enhancing price discovery and hedging opportunities.
- Volatility Shares submitted applications for three separate XRP ETFs, further expanding the product ecosystem.
These milestones suggest that XRP is increasingly being viewed not just as a speculative asset, but as a viable component of institutional portfolios.
However, not all metrics tell a positive story.
“XRP volume collapsed from $60 billion in December to under $8 billion now. Retail got flushed out,” noted crypto analyst Steph on social media, highlighting concerns about declining intraday activity on centralized exchanges.
While daily trading volume has indeed pulled back from its highs, the broader macro environment—marked by regulatory progress and financial product innovation—continues to support long-term investor confidence.
Decline in On-Chain Activity Raises Usage Concerns
In contrast to the vibrant spot market, on-chain activity on the XRP Ledger (XRPL) experienced a sharp downturn in Q1 2025.
Key metrics from the report reveal:
- A 37.06% drop in total transactions—from 167.7 million in Q4 2024 to 105.5 million in Q1 2025.
- A 40.28% decline in new wallet creations, falling from 709,545 to 423,727.
- A 30.89% reduction in XRP burned as transaction fees.
- A 16.94% decrease in decentralized exchange (DEX) volume, from $1 billion to $832 million.
These figures raise important questions about the XRPL’s real-world utility, especially given XRP’s top-tier market position.
Data from DefiLlama further underscores the stagnation: XRPL’s total value locked (TVL) has remained flat at around $80 million** throughout 2025. Monthly DEX volume hovers near **$3.3 million, a figure that appears disproportionately low for a top-four cryptocurrency.
This disconnect between market cap and on-chain activity suggests that while investors are buying and trading XRP, fewer are actively using the underlying blockchain for decentralized applications or peer-to-peer transactions.
What’s Behind the On-Chain Slowdown?
Several factors may explain the decline:
- Reduced speculative trading on XRPL’s native DEX due to improved centralized exchange liquidity.
- Limited growth in decentralized finance (DeFi) projects built on XRPL.
- A broader market trend favoring off-chain settlement and custodial solutions over self-custody.
However, Ripple’s strategic moves could reverse this trend.
“Ripple acquired Hidden Road for $1.25B — one of the largest M&A deals in crypto history – driving more institutional use cases for RLUSD and XRPL,” the report stated.
The acquisition of Hidden Road, a major institutional liquidity provider, is expected to enhance XRPL’s appeal for large-scale financial operations. The integration of RLUSD, Ripple’s regulated stablecoin, could also drive new transaction demand, particularly in cross-border payments and institutional settlements.
👉 Explore how blockchain innovation is reshaping global finance.
FAQ: Addressing Key Questions About XRP in 2025
Q: Why is XRP’s spot volume rising while on-chain activity falls?
A: Investors are increasingly treating XRP as a tradable asset rather than a utility token. Regulatory clarity and ETF speculation have driven spot market interest, while limited DeFi growth has dampened on-chain usage.
Q: Does low TVL mean XRPL is failing?
A: Not necessarily. TVL measures locked value in DeFi, but XRPL is primarily designed for fast, low-cost payments—not DeFi yield farming. Its value proposition lies in payment efficiency, not lending protocols.
Q: Can Ripple’s acquisition of Hidden Road boost on-chain activity?
A: Yes. By integrating institutional liquidity directly into XRPL, Ripple could increase transaction volume through regulated stablecoins like RLUSD and expand use cases in traditional finance.
Q: Is XRP a good investment in 2025?
A: With strong institutional backing, ETF filings, and regulatory resolution, XRP presents compelling long-term potential. However, investors should monitor both market sentiment and on-chain fundamentals.
Q: How does XRP compare to Bitcoin and Ethereum?
A: Unlike BTC (store of value) or ETH (smart contract platform), XRP is optimized for cross-border payments. Its value is tied to adoption by financial institutions and payment providers.
Q: Will an XRP ETF be approved in 2025?
A: While not guaranteed, the SEC’s withdrawal of its Ripple appeal improves approval odds. Franklin Templeton’s filing and CME futures are positive catalysts.
👉 Stay ahead of ETF developments and market-moving news with real-time data tools.
Conclusion: A Tale of Two Markets
Ripple’s Q1 2025 report paints a nuanced picture of XRP’s ecosystem. On one hand, spot trading volume, price performance, and institutional interest are all surging—signs of strong investor confidence. On the other hand, on-chain activity on XRPL has declined, raising valid concerns about blockchain utilization.
The key takeaway? XRP is increasingly being treated as a financial asset rather than a decentralized application platform. While this shift benefits short-term trading and investment flows, long-term sustainability will depend on expanding real-world use cases—especially through Ripple’s institutional partnerships and stablecoin initiatives.
As the crypto landscape matures, XRP’s ability to bridge traditional finance and blockchain innovation will determine its ultimate success.
Core Keywords: XRP, Ripple, spot trading volume, on-chain activity, XRPL, institutional adoption, ETF, decentralized exchange