XRP Ledger: On-Chain Surge Meets ETF Decision

On-chain activity on the XRP Ledger has spiked sharply, with transaction counts and payment volumes rising nearly 20% in recent days. This surge comes as market participants await the Feb. 8 XRP ETF results, a decision that could materially move price and sentiment. The timing is critical, as historic ETF-related flows-like the roughly $500M outflows from Bitcoin ETFs-have previously produced sharp market moves.

Contextually, this spike is notable against the ledger's established scale. In the second half of 2025, daily transactions averaged 1.8 million, with cumulative payment volume reaching 20.9 billion XRP since the network's inception. The recent 20% jump signals a significant acceleration in network utilization, a dynamic that could reflect either genuine adoption or preparatory distribution ahead of the ETF decision.

The bottom line is that this on-chain surge sets the stage for heightened price volatility. It represents a turning point where steady ETF inflows and improved sentiment could support a recovery, while continued distribution would risk further downside. For now, the ledger's activity is a clear signal of heightened market focus.

The ETF Catalyst: Flow vs. Sentiment

The immediate catalyst is here. Market anticipation for the Feb. 8 XRP ETF results is palpable, with historic precedent showing how such decisions can produce sharp moves. The recent on-chain surge may be a direct response to this event, as traders position ahead of potential flows.

This ETF momentum is substantial. Since late 2025, spot XRP ETFs have attracted $1.37 billion in under 60 days, with a remarkable streak of 43 consecutive days of positive inflows. This consistent demand is a powerful flow driver, potentially capable of converting the ledger's on-chain activity into sustained price action.

Yet the risk is sentiment-driven volatility. The setup is a classic flow-vs.-sentiment tug-of-war. Strong ETF inflows provide a fundamental floor, while the sheer volume of anticipation can amplify price swings. The Feb. 8 decision will test whether this flow momentum can overcome the distribution seen in exchange balances, which fell 57% to 1.7 billion tokens last year.

The Liquidity Test: Exchange Balances and Supply

The most critical liquidity metric is the dramatic decline in exchange balances. Throughout 2025, the pool of XRP on exchanges shrank by 57% to roughly 1.7 billion tokens. This represents a significant supply squeeze, as fewer tokens are readily available for sale, which can support price by tightening near-term supply.

This tight supply is enabled by the network's ultra-low cost structure. The median transaction fee is just 0.000012 XRP, making high-volume on-chain use and movement extremely cheap. This economic efficiency likely fuels the recent surge in transaction counts and payment volumes, as users can move large sums without prohibitive fees.

The key risk is that this supply squeeze could be overwhelmed. If distribution from exchanges continues at a pace that outstrips the $1.37 billion in ETF inflows seen in recent weeks, it would create a bearish pressure point. The Feb. 8 ETF decision will test whether institutional flow momentum can hold against this underlying distribution.

Relative Positioning: XRP vs. Ethereum and Solana

XRP Ledger's niche is institutional payment optimization. The network maintains processing capacity of over 1,000 transactions per second (TPS) with fees consistently under a cent. This is a direct performance advantage for high-volume, low-latency settlement, a use case that aligns with its recent ETF momentum and supply squeeze.

Solana, by contrast, leads in retail adoption metrics. In mid-January 2026, it hit 27.1 million active addresses, a 56% weekly increase. This explosive growth in user engagement, coupled with its ultra-fast finality upgrade, positions it as the leader in network activity and developer momentum for the broader altcoin rotation.

Ethereum anchors institutional finance through its Layer 2 scaling and real-world asset tokenization. While XRP focuses on payment rails, Ethereum's ecosystem is deploying blockchain-based bonds and equities. This institutional anchoring is why Tom Lee calls it "severely undervalued" and predicts a supercycle, giving it a different kind of competitive moat.

The comparison frames XRP's competitive standing: it is a specialized, high-performance payment layer with strong ETF flows, while Solana captures retail energy and Ethereum holds the institutional infrastructure crown. In an altcoin rotation, XRP's niche is clear, but its path depends on whether ETF momentum can overcome the broader market's preference for Solana's activity or Ethereum's institutional depth.