In recent months, Ripple’s native cryptocurrency, XRP, has surged into the spotlight, sparking widespread speculation across the global crypto community: Could XRP soon overtake Ethereum as the second-largest cryptocurrency by market capitalization? Once considered a long shot, this possibility is now being seriously evaluated by seasoned analysts and investors alike.
👉 Discover how XRP’s real-world utility is reshaping the future of digital finance.
A Bold Prediction from a Former Goldman Sachs Analyst
Dom Kwok, a former analyst at Goldman Sachs, has made waves with his bold forecast: XRP could surpass Ethereum in market cap in the near future, trailing only Bitcoin, which holds a dominant position with a market cap nearing $2 trillion. While Ethereum currently leads with a valuation of approximately $388 billion as of January 2025, XRP is not far behind at around $175 billion.
For XRP to close this gap, its price would need to rise roughly 120%—reaching about $7.07 per token—assuming Ethereum’s value remains stagnant. Though ambitious, this projection is backed by tangible momentum. Since November 2024, XRP has outperformed both Bitcoin and Ethereum, surging 351% more than ETH in that period alone—a staggering performance fueled by shifting market dynamics and growing institutional interest.
Key Drivers Behind XRP’s Momentum
Several interconnected factors are propelling XRP’s ascent:
1. Real-World Asset Tokenization via XRP Ledger
One of the most compelling narratives surrounding XRP is its role in tokenizing real-world assets (RWAs). The XRP Ledger (XRPL) offers a scalable, energy-efficient blockchain infrastructure ideal for digitizing traditional financial instruments such as bonds, commodities, and currencies. This capability positions XRP as a preferred platform for financial institutions exploring decentralized finance (DeFi) solutions without the high energy costs or congestion issues associated with proof-of-work systems.
2. Regulatory Clarity in the U.S.
The evolving regulatory landscape in the United States has significantly boosted investor confidence. With increasing support for crypto-friendly policies—especially under renewed political leadership advocating for American dominance in digital assets—the path toward approving more cryptocurrency-based ETFs has become clearer. This includes potential spot XRP ETFs, which could unlock massive institutional inflows.
3. Institutional Adoption and Banking Partnerships
Unlike many speculative tokens, XRP was built with institutions in mind. Ripple has already partnered with over 500 financial institutions worldwide, including major banks and payment providers, leveraging its On-Demand Liquidity (ODL) solution to facilitate instant cross-border transactions. These real-world use cases provide a strong foundation for sustained demand.
XRP vs. Ethereum: A Tale of Two Blockchains
While both are major players in the crypto space, XRP and Ethereum serve fundamentally different purposes.
| Feature | XRP (Ripple) | Ethereum |
|---|---|---|
| Primary Purpose | Cross-border payments & settlement | Smart contracts & decentralized applications (DApps) |
| Consensus Mechanism | Ripple Protocol Consensus Algorithm (RPCA) | Proof-of-Stake (PoS) |
| Transaction Speed | ~3-5 seconds | ~10-20 seconds |
| Transaction Cost | Fraction of a cent | Variable; can spike during congestion |
| Use Case Focus | Financial institutions, remittances | DeFi, NFTs, DAOs, Web3 |
Ethereum remains the leader in decentralized innovation, hosting thousands of DApps and serving as the backbone of the DeFi revolution. However, it faces persistent challenges—namely high gas fees and scalability bottlenecks—that limit its efficiency for everyday financial transactions.
XRP, on the other hand, excels in speed and cost-efficiency. Its consensus model doesn’t rely on mining, eliminating energy waste and enabling rapid settlement. This makes it particularly attractive for high-volume, low-latency financial operations, especially in international remittances where SWIFT’s legacy system still dominates but lags in speed and cost.
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Why Investors Are Turning to XRP
Crypto investors are increasingly prioritizing projects with clear utility and real-world adoption over purely speculative assets. In this environment, XRP stands out:
- Proven infrastructure: The XRPL has been operational since 2012, offering years of stability and security.
- Growing ecosystem: New projects are building on XRPL, including stablecoins, DeFi protocols, and NFT platforms.
- Energy efficiency: RPCA consumes minimal energy compared to PoW or even some PoS chains.
- Scalability: Capable of handling up to 1,500 transactions per second (TPS), far exceeding Ethereum’s base layer throughput.
Moreover, Ripple’s ongoing legal battle with the SEC appears to be nearing resolution, further reducing uncertainty and opening doors for broader exchange listings and product development.
Can XRP Truly Overtake Ethereum?
While surpassing Ethereum remains a tall order, it's no longer an impossibility. Ethereum's dominance stems from its vast developer community and first-mover advantage in smart contracts. Yet, its limitations in transaction cost and speed create an opening for alternatives like XRP—especially as enterprise adoption accelerates.
For XRP to claim the #2 spot, it must:
- Expand beyond payments into broader DeFi and tokenization use cases.
- Continue securing partnerships with central banks and multinational financial entities.
- Foster developer growth on XRPL to rival Ethereum’s ecosystem.
If these conditions align, a market cap crossover could occur—not through hype, but through sustained utility-driven growth.
Frequently Asked Questions (FAQ)
Is XRP better than Ethereum?
It depends on the use case. For fast, low-cost cross-border payments and institutional finance, XRP is superior. For decentralized apps, smart contracts, and NFTs, Ethereum remains unmatched.
Why is XRP rising so fast?
Key drivers include improved U.S. regulatory outlook, growing interest in asset tokenization via XRPL, strong institutional adoption, and post-election crypto market optimism.
Can XRP reach $7?
To surpass Ethereum’s current market cap, XRP would need to reach approximately $7.07, assuming no change in ETH’s valuation. While aggressive, this target is within reach if adoption accelerates and macro conditions remain favorable.
Does XRP have smart contract capabilities?
Yes—though historically limited, the XRP Ledger now supports basic smart contracts and decentralized exchanges through recent upgrades like Hookz and AMM functionality.
Is XRP environmentally friendly?
Absolutely. Unlike Bitcoin or early Ethereum, XRP uses a consensus algorithm that requires negligible energy—making it one of the most sustainable large-cap cryptocurrencies.
Will an XRP ETF be approved?
With increasing regulatory clarity and Ripple’s legal progress, a spot XRP ETF is becoming more likely—especially following approvals for Bitcoin and Ethereum ETFs.
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Final Thoughts: The Rise of Utility-Driven Cryptocurrencies
The narrative around cryptocurrencies is shifting—from pure speculation to real-world impact. In this new era, assets like XRP that offer scalable, efficient, and institution-ready solutions are gaining momentum.
While Ethereum continues to lead in decentralized innovation, its structural challenges open space for competitors focused on performance and practicality. With growing adoption in global finance, regulatory tailwinds, and a robust technological foundation, XRP is well-positioned to challenge the status quo.
Whether it overtakes Ethereum or not, one thing is clear: the future of crypto belongs to those who solve real problems—and XRP is proving it can do just that.