The rapid proliferation of XRP spot Exchange-Traded Funds (ETFs) in the US, with nearly a billion dollars in combined assets under management, has injected a new layer of excitement into the XRP ecosystem. However, this surge in regulated investment vehicles raises a critical question: does XRP's long-term demand truly stem from its foundational utility in cross-border payments and on-chain activity, or is it primarily driven by ETF-related speculation? The answer lies in the ongoing development and adoption of its underlying "plumbing," rather than just the ticker prices.
XRP's Dual Narrative: ETFs and Foundational Demand
The initial success of XRP ETFs is undeniable, with four products amassing $941.7 million by mid-December, growing significantly since their November launch. This has provided a clear channel for regulated US demand. Yet, this capital inflow, while substantial, is dwarfed by the scale of Ripple's On-Demand Liquidity (ODL) processed in 2024, which exceeded $15 billion. This disparity highlights a crucial distinction: while ETFs offer a measurable access point, they represent a relatively thin layer compared to the full flow of transactions within RippleNet. The true test for XRP's durability hinges on whether demand is anchored in its practical applications like cross-border flows, stablecoin rails, and persistent liquidity, rather than solely on the momentum of ETF inflows.
Beyond ETFs: ODL, On-Chain Activity, and RWA Expansion
XRP's potential for durable demand is best observed through the growth of its utility-driven metrics. RippleNet, now boasting over 300 financial institutions across more than 55 countries, saw ODL volumes surge to $15 billion in 2024, a 32% year-over-year increase, primarily in the Asia-Pacific region. ODL currently covers over 70 corridor pairs, addressing roughly 80% of major global remittance corridors. Concurrently, the XRPL is demonstrating significant on-chain vitality: average daily active addresses increased by 142% to 134,600 in Q1 2025, while daily transactions rose to 2 million. Payments remain the dominant use case, accounting for over 55% of all activity. Furthermore, the ecosystem is expanding into Real-World Assets (RWAs), with XRPL's tokenized RWA market cap hitting $347 million, and Ripple's RLUSD stablecoin achieving a total supply of $1.3 billion, with a significant presence on XRPL. These metrics point to organic growth in practical applications, forming the bedrock of XRP's value proposition beyond speculative trading.
The Litmus Test for XRP's Long-Term Viability
For XRP's demand to be deemed "durable" rather than merely ETF-driven, several key areas must demonstrate sustained growth even if ETF assets under management stabilize. Firstly, ODL volumes and corridor coverage must continue their upward trajectory, moving into the tens of billions annually with a majority of RippleNet clients opting for XRP-based settlements. Secondly, XRPL's on-chain metrics—including daily transactions, active addresses, and RWA issuance—need to keep rising consistently, indicating increasing fundamental use. Thirdly, XRP's liquidity quality, already rated highly by Kaiko (AA, 95/100, on par with Ethereum), must remain robust even when ETF net flows normalize, signaling strong market-maker and corridor-driven demand. Finally, the growth of RLUSD and tokenized assets on XRPL needs to evolve from hundreds of millions into genuinely system-level collateral, rather than remaining a minor component of the broader DeFi landscape. If these four indicators progress independently of ETF performance, it will signify that XRP's adoption is genuinely anchored in its functional utility and expanding ecosystem.
