Ripple’s payment token, XRP, has been dubbed the crypto market’s “new darling” by CNBC after rallying 25% in the first week of the year.
“The hottest crypto trade of the year is not Bitcoin, it’s not Ether—it’s XRP,” CNBC Power Lunch host Brian Sullivan said on Tuesday.
XRP jumps at the start of the year
Since Jan. 1, XRP has surged 25%, significantly outperforming Bitcoin, which is up around 6%, and Ether, which has gained roughly 10% over the same period.
Multiple tailwinds may be driving XRP’s outperformance, including growing exchange-traded fund momentum, improving social sentiment, strengthening on-chain fundamentals, and recent strategic partnerships.
XRP ETF momentum remains strong
CNBC host Mackenzie Sigalos noted that during the quiet market period in Q4, investors were increasingly turning to XRP ETFs—a trend that contrasts with spot Bitcoin and Ether ETFs, which generally move in line with the price of the underlying coin.
“This created the potential for a higher percentage jump,” Sigalos said, as investors bought the XRP dip in Q4, seeing it as “a less crowded trade” than BTC or ETH—a prediction that has held true in the first six trading days of January.
The four spot XRP ETFs have seen nearly $100 million in inflows since the start of the year, with Monday marking the largest daily inflow in over five weeks, according to Coinglass.
Total aggregate inflows now stand at $1.15 billion, and there has yet to be a single outflow day.
Bullish social sentiment and on-chain activity
Social sentiment for XRP remains strongly bullish. Market Prophit, which uses AI to track crypto-related social media activity, reports that both general crowd sentiment and “smart money sentiment” are positive.
XRP exchange reserves on Binance are also at their lowest levels in two years, according to CryptoQuant. High exchange balances typically signal that investors are preparing to sell, so lower reserves suggest holding pressure.
Network activity is rising as well, with transactions up more than 50% over the past two weeks, according to XRPscan.
Ripple expands in Japan
Ripple Labs has reportedly formed partnerships with major Japanese financial institutions, including Mizuho Bank, SMBC Nikko, and Securitize Japan, to promote adoption of the XRP Ledger in the country.
In December, Ripple received conditional approval from the U.S. Office of the Comptroller of the Currency to charter Ripple National Trust Bank.
Ripple President Monica Long told Bloomberg on Tuesday that the company’s November fundraising round and $40 billion valuation were “very positive and favorable for Ripple,” though she noted there are currently no immediate plans for an IPO.
