The hottest crypto trade of the year is no longer Bitcoin (BTC-USD) or Ethereum (ETH-USD), but Ripple’s payment token, XRP (XRP-USD). After a 25% jump in the first week of January, CNBC has officially labeled the asset the “new cryptocurrency darling.” While Bitcoin has managed a respectable 6% gain and Ether sits at 10%, XRP’s explosive performance suggests a fundamental restructuring of the digital asset hierarchy.
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This rally is the result of institutional adoption, shrinking supply, and strategic global partnerships.
XRP as a Portfolio Mainstay
In 2025, the institutional stance towards crypto was rewritten. According to year-end data from CoinShares (CNSRF), the era of Bitcoin-only dominance has ended. While Bitcoin products saw a 35% decline in inflow pace, capital poured into XRP at a 500% growth rate.
This institutional velocity is now hitting a boiling point. U.S. spot XRP ETFs have seen nearly $100 million in inflows since New Year’s Day, pushing cumulative inflows to approximately $1.15 billion without a single day of net outflows. Analysts note that while investors “piled into XRP ETFs” during the market lulls of late 2025, this less crowded trade has now become the primary driver of early-year alpha.
XRP Faces Shrinking Reserves and Network Activity Spike
On-chain data confirms that the supply of XRP available for purchase is drying up. Exchange reserves on Binance have hit their lowest levels in two years, a signal that investors are moving tokens into long-term storage rather than preparing to sell.
Simultaneously, network activity has spiked by over 50% in the last fortnight. Market Prophit’s AI analysis indicates that both smart money and crowd sentiment are at peak bullishness. This combination of rising demand and falling liquid supply is creating the upward price pressure that has allowed XRP to hold the $2.26 level even as other assets pause.
Ripple Charges Forward with Its Financial System Ambitions
Ripple Labs is also entrenching itself into the physical financial system. The company recently secured conditional approval from the OCC to charter the Ripple National Trust Bank, a move Ripple President Monica Long says is “very positive and favorable” for the firm’s $40 billion valuation.
In Japan, Ripple has formed a powerful alliance with Mizuho Bank (MFG) and SMBC Nikko (SMFG) to boost XRP Ledger adoption. This integration into the plumbing of the Japanese banking system allows Ripple to build a “sticky” ecosystem capable of withstanding the volatility of retail cycles.
The key takeaway is that XRP is benefiting from a record-breaking streak of $1.15 billion in ETF inflows and a supply squeeze that has pushed exchange reserves to a two-year low. Rather than relying on hype alone, Ripple is securing its future through a new U.S. federal bank charter and deep partnerships.
At the time of writing, XRP is sitting at $2.23.
