Institutional Demand Drives Confidence for Ripple's XRP

Ripple recently reported a strong third quarter, boosted by rising institutional interest in its XRP token and increased transaction volumes on the XRP Ledger. Ripple saw a notable uptick in activity, largely driven by major financial players like the Chicago Mercantile Exchange (CME) and Bitwise, which introduced new XRP-related products. Although many of the transactions were low-value microtransactions, the heightened institutional focus significantly pushed trading volumes higher.

The institutional shift towards XRP appears to be, in part, due to diminished credibility of the U.S. Securities and Exchange Commission (SEC) within the crypto space. As Ripple continues its legal battle with the SEC, several financial powerhouses have announced XRP-centered products. The CME, for instance, launched a reference price for XRP, while Bitnomial revealed plans to offer XRP futures. Bitwise, Canary, and 21Shares are also seeking approval to introduce exchange-traded funds (ETFs) linked to XRP, and Grayscale has taken steps to launch an XRP Trust and transition its Digital Large Cap Fund, which includes XRP, into an ETF.

Ripple’s CEO, Brad Garlinghouse, expressed confidence in the demand for XRP, pointing out that the SEC’s protracted struggle to regulate crypto has weakened its authority. “The market has made it clear — institutional demand for XRP products is stronger than ever,” Garlinghouse said. According to him, the SEC’s credibility has eroded due to its ongoing challenges in enforcing crypto regulations.

Ripple’s report also highlighted a rise in average daily volumes (ADV) on prominent exchanges, with XRP/BTC trading volumes increasing by 27% over the quarter. Key exchanges like Binance, Bybit, and Upbit recorded strong trading activity, with average volumes peaking early in the quarter before stabilizing and then increasing again toward the end of September. Over Q3, the XRP Ledger also experienced a substantial increase in transaction volume, doubling from Q2’s levels. Ripple noted that much of this growth was fueled by small transactions under 1 XRP, which they believe were part of a spam campaign. Despite the increased transaction count, total on-chain volume did not rise proportionally, as many of these were small-volume microtransactions.

Additionally, Ripple’s Automated Market Makers (AMMs) saw Total Value Locked (TVL) more than double over the quarter. While the network’s transaction volume surged, average transaction fees decreased by approximately a third, making transactions cheaper for users.