XRP ETFs Surge: Assessing the $1.6 Billion Layer and its Impact on Payments
The launch of spot XRP Exchange Traded Funds (ETFs) in the United States has injected significant capital into the XRP ecosystem, currently totaling over $1.6 billion in Assets Under Management (AUM) as of early 2026. This influx of investment represents a pivotal moment for XRP, but the crucial question remains: is this demand sustainable, or is it primarily driven by ETF speculation? This article delves into the current state of XRP, analyzing the ETF impact, on-chain activity, Ripple’s On-Demand Liquidity (ODL) growth, and the broader adoption landscape to determine if XRP’s future is anchored in real-world utility or simply ETF flows.
The Rapid Growth of XRP ETFs
Four XRP spot ETFs are now actively trading in the US: Grayscale's GXRP, Canary Capital's XRPC, Franklin Templeton's XRPZ, and Bitwise's XRP ETF. Combined, these ETFs hold approximately $1.6 billion in assets, a substantial increase from the roughly $336 million at launch in November. This rapid growth demonstrates considerable initial interest from regulated US investors. However, the pace of inflows has begun to moderate, raising questions about long-term sustainability.
Two Parallel Narratives: ETFs vs. Real-World Utility
XRP now presents two distinct narratives. The first is the ETF layer, which has successfully captured regulated US demand. The second is the underlying payments and infrastructure layer, which must prove its viability independent of ETF flows. The core question isn’t whether XRP has generated interest through its ETF products, but whether it possesses durable demand rooted in cross-border payments, stablecoin integration, and consistent liquidity that can withstand a plateau in ETF AUM.
ETF AUM vs. Ripple’s On-Demand Liquidity
Currently, ETF exposure has surpassed the $293 million of Ripple’s USD stablecoin (RLUSD) held on the XRPL. However, this figure remains significantly smaller than the $15 billion processed through Ripple’s On-Demand Liquidity (ODL) in 2024. This highlights that while the ETF wrapper is measurable, it’s still relatively thin compared to the overall flow running through RippleNet and the daily payments occurring on the XRPL.
If ETF flows stagnate, the true measure of XRP’s adoption lies in its underlying infrastructure, not just ticker performance.
RippleNet and ODL: The Core of XRP’s Utility
RippleNet now boasts over 300 financial institutions across more than 55 countries. Crucially, approximately 40% of these institutions are actively utilizing XRP for On-Demand Liquidity (ODL), rather than solely relying on messaging rails. This represents a significant increase in XRP’s practical application within the Ripple ecosystem.
ODL Growth and Global Reach
In 2024, ODL processed over $15 billion in cross-border payments, a 32% year-over-year increase. The Asia-Pacific region accounts for roughly 56% of this volume. ODL now spans over 70 corridor pairs, covering an estimated 80% of major global remittance corridors. DAS Research projects ODL volume to reach approximately $1.3 billion in the second quarter of 2025 alone, underscoring Ripple’s ambition to establish XRP as a core payments infrastructure.
XRPL On-Chain Activity
The XRPL witnessed a surge in activity in the first quarter of 2025. Average daily active addresses increased by 142% to 134,600, while daily transactions rose by 13.3% to 2 million. This growth indicates increasing user engagement and network utilization.
RippleNet, as a whole, is processing over $15 billion in cross-border transaction volume monthly as of 2025. However, it’s important to note that many institutions utilize RippleNet’s messaging services without settling transactions in XRP. The key metrics to watch are ODL volume, corridor coverage, and the percentage of partners routing traffic through XRP.
The Global Payments Landscape and XRP’s Potential
Global cross-border payment volumes are estimated to range from $130 trillion to $150 trillion annually. Even $30 billion in annual ODL volume, while significant for XRP, represents a small fraction of the overall market. Genuine adoption would require ODL volumes to compound significantly, with more than half of RippleNet clients opting into XRP, and expansion beyond the current focus on Asia-Pacific remittance corridors.
Beyond Speculation: On-Chain Activity and Real-World Applications
The XRPL handled approximately 1.8 million transactions per day in the third quarter of 2025, a 9% increase quarter-over-quarter, with typical finality in 3 to 5 seconds. Average daily active sender addresses reached 25,300, with 447,200 new addresses created during the quarter, bringing the total to roughly 6.9 million. Weekly payment counts are up roughly 430% compared to 2023 levels, demonstrating a clear trend towards increased usage.
The Rise of Tokenized Real-World Assets (RWAs)
“Payment” transactions continue to dominate activity on the XRPL, accounting for approximately 55.7% of total activity in the third quarter of 2025, with around 989,600 daily payments. However, the tokenized Real-World Asset (RWA) market is gaining traction. XRPL’s RWA market cap reached $347 million at the end of the third quarter, a 193% quarter-over-quarter increase, driven by US Treasury funds like Ondo’s OUSG, commercial paper, and real-estate tokens.
By December, the tokenized asset market value on XRPL had grown from near zero in early 2025 to over $400 million, fueled by stablecoins and RWAs.
Ripple’s RLUSD Stablecoin
Ripple’s RLUSD stablecoin, launched in December 2024 on both XRPL and Ethereum, has a total supply of $1.3 billion as of early 2026. Within XRPL specifically, RLUSD has a market cap of roughly $293 million, up 41% in the past 30 days. Ripple is also piloting RLUSD on Layer-2 solutions like Optimism and Base via Wormhole’s NTT standard.
While RLUSD is a billion-dollar asset, its presence on XRPL remains a minority compared to its dominance on Ethereum. Durable on-chain adoption requires continued growth in payment transactions, RWA capitalization, RLUSD usage specifically on XRPL, and an expanding user base.
Liquidity and Institutional Adoption
Kaiko’s crypto asset ranking for the third quarter of 2025 places XRP tied with Ethereum in second place, with an AA score of 95 out of 100. This score reflects strong liquidity, market depth, exchange availability, institutional adoption, and derivatives maturity, comparable to Bitcoin. XRP’s average daily trading volume is around $1.73 billion, a 22% year-over-year increase, indicating that market makers treat it as a top-tier asset, regardless of ETF headlines.
At the decentralized exchange (DEX) and Automated Market Maker (AMM) layer, average daily CLOB volume for fungible issued currencies was about $7.9 million in the third quarter, with around 1 million CLOB trades and roughly 7,800 daily CLOB traders. Average daily AMM volume was about $1.7 million. While these numbers are small compared to centralized venues, they demonstrate fragmented liquidity.
The Adoption Test: What Needs to Happen for Durable Demand?
Assuming ETF AUM stabilizes around $1.6 to $1.7 billion, what needs to happen over the next 12 to 24 months to confirm XRP’s demand is truly durable, rather than solely ETF-driven?
- Continued ODL Growth: ODL volumes and corridor coverage must continue to expand beyond the $15 billion registered in 2024 and the 70+ corridor pairs.
- XRPL On-Chain Growth: The network’s on-chain payments base of roughly 1.8 million daily transactions and 6.9 million addresses needs to continue rising.
- RWA and RLUSD Expansion: RWA market cap and RLUSD usage on XRPL must grow, rather than migrating to Ethereum.
- Liquidity Maintenance: Kaiko’s AA score of 95/100 needs to be maintained, with order-book depth and open interest remaining robust even as ETF inflows normalize.
If these four conditions are met while ETF AUM remains flat, it will be a strong indication that XRP’s adoption is real. However, if ODL volumes stall, on-chain metrics decline, RWA and RLUSD growth shift off-ledger, and liquidity scores slip, the conclusion will be that the 2025-26 XRP trade was largely driven by ETFs, not fundamental demand. The plumbing will ultimately decide XRP’s fate.