How regulatory clarity propelled XRP past ETH
XRP (XRP), introduced by Ripple Labs in 2012, was designed as a fast and cost-effective digital asset for cross-border transactions. However, its growth was hindered by a 2020 lawsuit from the US Securities and Exchange Commission, which alleged that Ripple had conducted unregistered securities offerings.
The multi-year case left XRP’s regulatory status uncertain, discouraging banks and funds from using its payment network. Portfolio managers viewed XRP as a high-risk asset, limiting its growth compared to other cryptocurrencies, particularly Ether (ETH).
While XRP was gaining traction among investors, Ether continued to hold its place as the second-largest cryptocurrency after Bitcoin (BTC). Its strength came from a robust ecosystem powered by decentralized finance (DeFi), non-fungible tokens (NFTs) and smart contracts. However, ETH also faced challenges, including scalability limitations and high transaction fees.
As institutions focused more on faster, cheaper settlement, questions began to surface about Ether’s long-term dominance. Once XRP’s compliance issues eased, it was well-positioned to benefit.
How the SEC settlement brought in a new era of institutional trust
In August 2025, Ripple Labs and the SEC reached a settlement, ending their nearly five-year legal battle. Both parties withdrew their appeals, and the ruling reaffirmed that XRP is not a security in secondary-market transactions.
Ripple’s $125-million settlement with the SEC ended years of regulatory uncertainty around XRP. The ruling marked a watershed moment, restoring institutional confidence and setting the stage for renewed adoption.
After the Ripple-SEC settlement, clearer regulations opened the door for new financial products, including proposed XRP exchange-traded funds (ETFs) and expanded exchange listings. The SEC is expected to decide on several spot XRP ETF applications by October 2025. While many other cryptocurrencies still face regulatory uncertainty, XRP’s clarified legal status gives it a stronger footing with institutional and Wall Street investors.
Did you know? Wall Street gets its name from a wooden wall built by Dutch settlers in the 1600s to protect New Amsterdam (now New York City) from invaders.
Institutional adoption and market signals
Although the settlement was finalized in August 2025, signs of renewed interest in XRP had already started to appear. In July, the token saw strong price gains alongside higher trading volumes and growing institutional accumulation.
Custodian data supports the trend. BitGo reported that XRP made up 3.9% of its holdings as of June 30, 2025, highlighting its growing share in regulated portfolios. The inclusion suggests steady institutional interest in XRP’s utility and compliance profile.
In May 2025, CME Group introduced XRP futures, which saw $542 million in trading volume during their first month — about 45% of it from outside North America. Open interest started at around $70.5 million and climbed past $1 billion by August, pointing to rising demand for regulated exposure to XRP.
As of October 2025, the SEC is reviewing several spot XRP ETF applications. Filings have come from issuers including Grayscale, Bitwise, 21Shares and Canary Capital. The participation of established asset managers adds credibility to the growing push for XRP-based ETFs.
How XRP challenged ETH in certain metrics in 2025
In 2025, XRP has outperformed Ether in several key metrics, signaling a shift in institutional adoption and market sentiment.
The SEC-Ripple settlement in August 2025 removed a major regulatory hurdle for XRP, giving it legal clarity similar to Ether’s. Unlike the Ethereum blockchain, which is centered on DeFi and smart contracts, XRP Ledger focuses on payments, liquidity and fast cross-border transfers. With settlement times of just three to five seconds and minimal fees, it stands out for its payment efficiency.
In 2025, XRP has gained solid momentum, with sharp price increases and steady trading volumes reflecting renewed investor confidence. At several points this year, it has outpaced Ether’s growth, highlighting a shift in interest toward utility-focused assets with clearer regulatory backing.
Did you know? A 2023 US court ruling found that XRP sales on public exchanges did not constitute securities transactions, providing crucial legal clarity.
Implications for investors, portfolio strategy and market structure
XRP’s growth in 2025 carries important implications for investors, institutions and the wider crypto market. Its performance shows how utility-driven assets can shape portfolio strategies and overall market trends.
Here are the implications of the rise of XRP in 2025:
For crypto investors and portfolio managers: XRP’s utility-focused design positions it as a bridge between fiat and digital systems, while the SEC settlement has eased much of the legal uncertainty around it.
For institutional adoption: XRP is increasingly seen as a model for regulated crypto integration, with proposed ETFs and structured products reinforcing that view.
For broader finance: XRP’s momentum could shift attention toward utility-based assets over speculative ones and may influence how regulators approach other cryptocurrencies. Still, its long-term competition will likely include central bank digital currencies (CBDCs) and stablecoins, which pose both opportunities and challenges to its role.
Did you know? Unlike mined cryptocurrencies, XRP’s 100 billion tokens were all pre-mined at launch in 2012. Ripple Labs still holds a large portion — mostly in escrow — to manage liquidity and distribution.
Challenges, risks and counterarguments
Despite XRP’s recent gains, a few factors continue to weigh on its outlook. These include regulatory challenges outside the US, the rise of newer technologies and other market uncertainties.
Regulatory issues outside America: While the SEC has settled its case with Ripple in the US, it may face regulatory hurdles in other parts of the world, such as Europe and Asia.
Emergence of rival tech: Advancing technology and growing competition remain concerns. Other payment-focused cryptocurrencies or newer, more advanced blockchains could eventually challenge XRP’s edge in speed and cost.
Overdependence on institutional investment: Unlike Ether and many other cryptocurrencies, XRP’s momentum depends heavily on institutional participation. If that interest fades, its growth could slow down.
Lack of extensive developer community: Ether’s strength comes from its large developer community, wide range of decentralized apps and constant innovation — areas where XRP still falls short.
These factors indicate that while XRP offers clear utility, maintaining long-term leadership will require it to broaden its ecosystem. It will need to overcome regulatory inconsistencies in various parts of the world and find ways to reduce dependence on institutional investment.
