How clarity of regulations has driven XRP in the past
Introduced by Ripple Labs in 2012, XRP (XRP) was designed as a fast, cost-effective digital asset for cross-border transactions. However, that growth was hampered by a 2020 lawsuit from the U.S. Securities and Exchange Commission, claiming Ripple had provided unregistered securities.
The multi-year case has led to uncertainty in the XRP regulatory situation, preventing banks and funds from using payment networks. Portfolio managers viewed XRP as a risky asset and limited growth compared to other cryptocurrencies, particularly ether (ETH).
While XRP gained traction among investors, Ether continued to hold its position as the second largest cryptocurrency, after Bitcoin (BTC). Its strengths stem from a robust ecosystem with distributed finance (DEFI), inappropriate tokens (NFTs), and smart contracts. However, ETH also faced challenges such as scalability limitations and high transaction fees.
As the institution focused on faster and cheaper settlements, questions began to arise about the long-term domination of the ether. We were able to benefit from the reduction in XRP compliance issues.
How SEC Reconciliation has brought about a new era of institutional trust
In August 2025, Ripple Labs and the SEC reached a settlement, ending a nearly five-year legal battle. The parties rescinded the appeal and the ruling reaffirmed that XRP is not the security of secondary market transactions.
Ripple’s $125 million settlement with the SEC has concluded years of uncertainty among regulators around XRP. The verdict marked a moment of fork, restored institutional confidence and set the stage for a new adoption.
After the Ripple-SEC settlement, clearer regulations, such as XRP Exchange Sales Funds (ETFs) and expanding exchange lists, opened the door for new financial products. The SEC is expected to determine several spot XRP ETF applications by October 2025. While many other cryptocurrencies still face regulatory uncertainty, XRP’s clear legal status gives a stronger foundation with institutional and Wall Street investors.
Did you know? Wall Street acquires its name from a wooden wall built by Dutch settlers in the 1600s, protecting the new Amsterdam (now New York City) from invaders.
Institutional adoption and market signals
The settlement was finalised in August 2025, but signs of new interest in XRP were already beginning to emerge. In July, tokens saw strong price increases along with higher trading volumes and increased facility accumulation.
Custodian data supports this trend. BITGO reported that XRP accounted for 3.9% of its holdings as of June 30, 2025, highlighting an increase in share in its regulated portfolio. Inclusion suggests a steady institutional interest in XRP’s utility and compliance profile.
In May 2025, the CME Group introduced XRP futures. This saw a trading volume of $542 million in the first month. Approximately 45% of that amounts to about 45% from North America. Open interest began at around $70.5 million and rose above $1 billion by August, pointing to an increase in demand for regulated exposure to XRP.
As of October 2025, SEC is reviewing several SPOT XRP ETF applications. The filing comes from publishers that include Grayscale, Bitwise, 21Share, and Canary Capital. Established asset manager participation adds reliability to the growing push to XRP-based ETFs.
How XRP challenged ETH with certain indicators for 2025
In 2025, XRP outperforms the ether in several key metrics, indicating the adoption of the system and the change in market sentiment.
The Sec-Ripple settlement in August 2025 removed the major regulatory hurdles for XRP, providing similar legal clarity to Ether. Unlike the Ethereum blockchain, which focuses on Defi and Smart Contracts, XRP Ledger focuses on payments, liquidity and fast cross-border transfers. The payment time is only 3-5 seconds, with a minimum fee of just 3-5 seconds, and it stands out for its payment efficiency.
In 2025, XRP gained strong momentum, achieving a steady trading volume that reflected sharp price increases and new investors’ trust. At some points this year, it outweighs ether growth and highlights a shift in interest in utility-centric assets with clearer regulatory support.
Did you know? 2023 US Court Judgment Found XRP sales on public exchanges did not constitute a securities transaction and provided significant legal clarity.
Impact on investors, portfolio strategies and market structure
XRP growth in 2025 will have significant implications for investors, institutions and the broader crypto market. Its performance shows how utility-driven assets can shape portfolio strategies and overall market trends.
Here is what the rise of XRP in 2025 means:
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For crypto investors and portfolio managers: While XRP’s utility-centric design positions it as a bridge between the Fiat and the digital system, the SEC settlement eased much of the legal uncertainty surrounding it.
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For institutional adoption: XRP is increasingly seen as a model for regulated cryptographic integration, reinforced by the proposed ETF and structured products that enhance its view.
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For wider finances: XRP’s momentum could shift attention to utility-based assets rather than speculative assets, which could affect how regulators approach other cryptocurrencies. Still, that long-term competition is likely to include central bank digital currency (CBDC) and stubcoins, bringing both opportunities and challenges to its role.
Did you know? Unlike mined cryptocurrencies, all XRP’s 100 billion tokens were pre-embedded at its 2012 launch. Ripple Labs are still largely in escrow to manage liquidity and distribution.
Challenges, risks, and counterarguments
Despite XRP’s recent benefits, several factors continue to weigh the outlook. These include regulatory challenges outside the US, the rise of new technologies and other market uncertainties.
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Non-US regulatory issues: The SEC settled its lawsuit with US ripples, but could face regulatory hurdles in other parts of the world, including Europe and Asia.
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The emergence of rival technology: Technological advancements and competitive growth remain a concern. Other payment-focused cryptocurrencies or newer, more sophisticated blockchains could ultimately challenge the speed and cost of XRP.
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Overreliance on institutional investment: Unlike ether and many other cryptocurrencies, XRP’s momentum relies heavily on institutional participation. If its profits fade, its growth can slow down.
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Lack of a large developer community: The strength of Ether comes from a large developer community, a wide range of distributed apps and constant innovation. This is an area where XRP is still lacking.
These factors indicate that while XRP offers clear utility, the ecosystem needs to be expanded to maintain long-term leadership. We need to find ways to overcome the contradictions of regulations in various regions of the world and reduce our reliance on institutional investments.