How regulatory clarity propelled XRP past ETH
XRP (XRP), launched by Ripple Labs in 2012, was intended as a rapid and economical digital asset for international transactions. However, its development was stymied by a lawsuit from the US Securities and Exchange Commission in 2020, which claimed that Ripple had engaged in unregistered securities offerings.
The prolonged legal battle left XRP’s regulatory status ambiguous, deterring banks and investment funds from utilizing its payment network. Portfolio managers deemed XRP a high-risk asset, which restricted its growth in relation to other cryptocurrencies, notably Ether (ETH).
While XRP attracted some investors, Ether maintained its position as the second-largest cryptocurrency behind Bitcoin (BTC). Its resilience stemmed from a solid ecosystem driven by decentralized finance (DeFi), non-fungible tokens (NFTs), and smart contracts. Nonetheless, ETH faced challenges, such as scalability issues and elevated transaction costs.
As institutional focus shifted towards quicker, cheaper settlement options, concerns about Ether’s long-term supremacy emerged. Once XRP’s compliance challenges subsided, it became well-equipped to take advantage of this evolution.
How the SEC settlement brought in a new era of institutional trust
In August 2025, Ripple Labs and the SEC reached a settlement, concluding their nearly five-year legal struggle. Both parties retracted their appeals, and the judgment confirmed that XRP is not classified as a security in secondary-market dealings.
Ripple’s $125-million settlement with the SEC concluded years of regulatory ambiguity surrounding XRP. The ruling represented a pivotal moment, restoring institutional trust and paving the way for renewed adoption.
Following the Ripple-SEC agreement, clearer regulations facilitated the launch of new financial products, such as proposed XRP exchange-traded funds (ETFs) and expanded exchange listings. The SEC is anticipated to make determinations on multiple spot XRP ETF applications by October 2025. While many other cryptocurrencies continue to grapple with regulatory ambiguity, XRP’s clarified legal standing provides it with a robust foundation among institutional and Wall Street investors.
Did you know? Wall Street derives its name from a wooden wall constructed by Dutch settlers in the 1600s to defend New Amsterdam (now New York City) from invaders.
Institutional adoption and market signals
Though the settlement was finalized in August 2025, signs of renewed interest in XRP had become evident earlier. In July, the token experienced significant price increases along with heightened trading volumes and increasing institutional accumulation.
Custodian data supports this trend. BitGo reported that XRP constituted 3.9% of its holdings as of June 30, 2025, showcasing its increasing share in regulated portfolios. This inclusion indicates sustained institutional interest in XRP’s utility and compliance profile.
In May 2025, CME Group launched XRP futures, which recorded $542 million in trading volume during their inaugural month — approximately 45% originating from outside North America. Open interest began at around $70.5 million and surged past $1 billion by August, indicating rising demand for regulated exposure to XRP.
As of October 2025, the SEC is assessing numerous spot XRP ETF applications. Filings have come from institutions like Grayscale, Bitwise, 21Shares, and Canary Capital. The involvement of established asset managers enhances the credibility of the growing push for XRP-based ETFs.
How XRP challenged ETH in certain metrics in 2025
In 2025, XRP outperformed Ether across several key metrics, indicating a shift in institutional adoption and market perception.
The SEC-Ripple settlement in August 2025 eliminated a significant regulatory barrier for XRP, granting it legal clarity akin to that of Ether. Contrary to the Ethereum blockchain, which emphasizes DeFi and smart contracts, the XRP Ledger prioritizes payments, liquidity, and swift cross-border transfers. With transaction times ranging from just three to five seconds and minimal fees, XRP stands out for its payment efficiency.
In 2025, XRP gained substantial momentum, with sharp price increases and consistent trading volumes reflecting renewed investor confidence. At various instances this year, it outperformed Ether’s growth, underscoring a shift in interest towards utility-driven assets with clearer regulatory backing.
Did you know? A 2023 US court decision determined that XRP sales on public exchanges were not regarded as securities transactions, providing essential legal clarity.
Implications for investors, portfolio strategy and market structure
XRP’s advancement in 2025 carries significant implications for investors, institutions, and the broader crypto market. Its performance illustrates how utility-oriented assets can influence portfolio strategies and overall market dynamics.
Key implications of XRP’s rise in 2025 include:
For crypto investors and portfolio managers: XRP’s utility-driven design positions it as a bridge between fiat and digital currencies, while the SEC settlement has alleviated much of the legal ambiguity surrounding it.
For institutional adoption: XRP is increasingly regarded as a benchmark for the regulated integration of crypto, with proposed ETFs and structured products reinforcing this perception.
For broader finance: XRP’s momentum may redirect attention toward utility-centric assets over speculative ones and could shape regulators’ approaches to other cryptocurrencies. Nonetheless, its long-term competition will likely include central bank digital currencies (CBDCs) and stablecoins, posing both opportunities and challenges to its role.
Did you know? Unlike mined cryptocurrencies, XRP’s entire supply of 100 billion tokens was pre-mined at launch in 2012. Ripple Labs retains a significant portion — primarily in escrow — to manage liquidity and distribution.
Challenges, risks and counterarguments
Despite XRP’s recent progress, several factors continue to impact its outlook. These include regulatory challenges beyond the US, the emergence of new technologies, and other market uncertainties.
Regulatory issues outside America: While the SEC has resolved its case with Ripple in the US, the token may encounter regulatory challenges in regions such as Europe and Asia.
Emergence of rival tech: Advancements in technology and intensifying competition persist as concerns. Other payment-centric cryptocurrencies or newer, more advanced blockchains may eventually challenge XRP’s competitive advantages in speed and cost.
Overdependence on institutional investment: Unlike Ether and many other cryptocurrencies, XRP’s momentum heavily
overdepends on institutional participation. If that interest diminishes, its growth may slow.
Lack of extensive developer community: Ether’s strength lies in its large developer community, diverse decentralized applications, and continuous innovation — areas where XRP still lacks.
These factors indicate that while XRP presents clear utility, sustaining long-term leadership will demand an expansion of its ecosystem. It must navigate regulatory inconsistencies globally and discover methods to reduce reliance on institutional investment.
