How regulatory clarity propelled XRP past ETH
XRP (XRP), launched by Ripple Labs in 2012, was intended as a fast and affordable digital asset for international transactions. However, its growth was stunted by a lawsuit from the US Securities and Exchange Commission in 2020, which claimed that Ripple engaged in unregistered securities offerings.
This protracted legal battle left XRP’s regulatory status in limbo, deterring banks and investment funds from utilizing its payment network. As a result, portfolio managers viewed XRP as a high-risk investment, constraining its expansion relative to other cryptocurrencies, especially Ether (ETH).
While XRP was attracting investors, Ether maintained its position as the second-largest cryptocurrency after Bitcoin (BTC). Its strength stemmed from a robust ecosystem bolstered by decentralized finance (DeFi), non-fungible tokens (NFTs), and smart contracts. Nonetheless, ETH faced challenges, such as scalability issues and soaring transaction costs.
As institutions grew more interested in quicker, more cost-effective settlements, doubts began to arise about Ether’s long-term dominance. Once XRP’s compliance concerns were alleviated, it was excellently positioned for growth.
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 dispute. Both sides withdrew their appeals, and the ruling established that XRP is not a security in secondary-market transactions.
Ripple’s $125 million settlement with the SEC brought years of regulatory ambiguity regarding XRP to an end. This decision was pivotal, restoring trust among institutions and paving the way for renewed adoption.
Following the Ripple-SEC settlement, clearer regulations facilitated new financial products, such as proposed XRP exchange-traded funds (ETFs) and enhanced exchange listings. The SEC is expected to review several spot XRP ETF applications by October 2025. In contrast to many other cryptocurrencies still encumbered by regulatory uncertainty, XRP’s clarified legal status strengthens its appeal among institutional and Wall Street investors.
Did you know? Wall Street derives its name from a wooden barrier erected by Dutch settlers in the 1600s to shield New Amsterdam (now New York City) from intruders.
Institutional adoption and market signals
Even though the settlement was finalized in August 2025, indicators of renewed enthusiasm for XRP had begun surfacing. In July, the token experienced significant price increases alongside heightened trading volumes and broader institutional accumulation.
Custodial data corroborates this trend. BitGo reported that XRP accounted for 3.9% of its holdings as of June 30, 2025, emphasizing its increasing presence in regulated portfolios. This inclusion suggests continuous institutional interest in XRP’s functionality and compliance status.
In May 2025, CME Group launched XRP futures, which achieved a trading volume of $542 million in their debut month—approximately 45% of which originated from outside North America. Open interest initiated at around $70.5 million and surged past $1 billion by August, indicating an uptrend in demand for regulated exposure to XRP.
As of October 2025, the SEC is evaluating several spot XRP ETF applications, with filings from issuers like Grayscale, Bitwise, 21Shares, and Canary Capital. The involvement of well-established asset managers enhances credibility in the growing demand for XRP-based ETFs.
How XRP challenged ETH in certain metrics in 2025
In 2025, XRP has surpassed Ether in various key metrics, indicating a shift in institutional adoption and market perception.
The SEC-Ripple settlement in August 2025 eliminated a significant regulatory obstacle for XRP, providing it with legal clarity akin to that of Ether. Unlike the Ethereum blockchain, which focuses on DeFi and smart contracts, the XRP Ledger centers on payments, liquidity, and rapid cross-border transactions. With settlement times of just three to five seconds and minimal fees, it excels in payment efficiency.
In 2025, XRP demonstrated strong momentum, with dramatic price surges and consistent trading volumes reflecting renewed investor confidence. Throughout the year, it has frequently outperformed Ether’s growth, showcasing a shift in focus toward utility-driven assets with clearer regulatory support.
Did you know? A 2023 US court ruling determined that XRP trades on public exchanges did not qualify as securities transactions, providing essential legal clarity.
Implications for investors, portfolio strategy and market structure
The growth of XRP in 2025 carries significant implications for investors, institutions, and the larger cryptocurrency market. Its performance illustrates how utility-oriented assets can influence portfolio strategies and overall market dynamics.
Here are the implications of XRP’s rise in 2025:
For crypto investors and portfolio managers: XRP’s utility-focused nature positions it as a conduit between fiat and digital systems, while the SEC settlement has alleviated much of the legal ambiguity surrounding it.
For institutional adoption: XRP is increasingly viewed as a prototype for regulated cryptocurrency integration, with proposed ETFs and structured products reinforcing that perspective.
For broader finance: XRP’s upward trajectory might shift focus toward utility-driven assets versus speculative ones, potentially influencing regulatory approaches to other cryptocurrencies. However, its ongoing competition will likely include central bank digital currencies (CBDCs) and stablecoins, which introduce both opportunities and challenges to its role.
Did you know? In contrast to mined cryptocurrencies, all 100 billion XRP tokens were pre-mined at launch in 2012. Ripple Labs retains a substantial portion—mainly in escrow—to manage liquidity and distribution.
Challenges, risks and counterarguments
Though XRP has seen recent successes, several factors continue to impact its outlook. These include regulatory challenges beyond the US, the emergence of new technologies, and various market uncertainties.
Regulatory issues outside America: While the SEC has resolved its case with Ripple in the US, it may encounter regulatory obstacles elsewhere, particularly in Europe and Asia.
Emergence of rival technology: Advancing technologies and increasing competition remain concerns. Other payment-centric cryptocurrencies or newer, more sophisticated blockchains could eventually undercut XRP’s advantages in speed and cost.
Overreliance on institutional investment: Unlike Ether and many other cryptocurrencies, XRP’s growth is significantly tied to institutional involvement. Should that interest wane, its growth could slow.
Limited developer ecosystem: Ether’s strength lies in its vast developer community, extensive range of decentralized applications, and continual innovation—areas where XRP still lags.
These factors suggest that while XRP offers clear utility, maintaining long-term leadership will necessitate broadening its ecosystem. It must navigate regulatory inconsistencies worldwide and explore ways to reduce its reliance on institutional investments.
