XRP News Today: XRP valuation surges 600% amid ETF momentum and RWA growth concerns

XRP has surged over 600% since November, reaching a market capitalization of around $190 billion as investors evaluate the ripple effect of regulatory developments and the growing momentum behind exchange-traded funds (ETFs). This rapid ascent has led some to question whether XRP is currently overvalued relative to its on-chain fundamentals [1].

The XRP Ledger (XRPL), the blockchain that supports the XRP token, has a total value locked (TVL) of $87.74 million, according to DefiLlama. In comparison, the market cap of XRP is over 2,200 times greater than its TVL. Additionally, the annualized fee revenue generated by the XRPL is only $1,467, which means XRP is valued at approximately 363,000 times its fee revenue. These metrics suggest a significant disparity between XRP's current valuation and its on-chain usage [1].

Some analysts argue that XRP is "way overvalued," particularly when compared to Ethereum, which has a market cap of over $516 billion and a TVL of $92.06 billion. Ethereum’s market cap-to-TVL ratio is 5.6, and its market cap-to-annualized-fee ratio is 135—both significantly lower than those of XRP. Despite this, XRP holds nearly 40% of Ethereum’s market cap, leading to concerns about whether the current price is justified by underlying network activity [1].

On the other hand, XRP supporters argue that the valuation reflects a forward-looking bet on the potential growth of the XRPL. They point to recent developments, such as the tokenization of real-world assets (RWAs), as indicators of future demand. According to RWA.xyz, the XRP Ledger now hosts $175.9 million in tokenized assets, with a 52.25% increase in the past month. These assets include US Treasury debt, public equities, real estate, and stablecoins. The rapid growth of tokenized assets on XRPL is among the fastest in the RWA sector and could drive increased adoption and demand for XRP [1].

However, technical indicators suggest a potential correction. A bearish divergence has emerged between XRP’s price and its relative strength index (RSI), a sign that buying pressure is weakening despite rising prices. Analysts suggest that this pattern has historically preceded market corrections. Based on this divergence, XRP could face a pullback toward the $2.32 level, which is near the 20-week exponential moving average and the average realized price over the past six months [1].

The $2.32 level is particularly significant because it represents the average cost basis at which many XRP holders acquired their tokens during the past six months. If the price approaches this level, it could act as a support zone, potentially attracting buyers who view the token as undervalued at that level. Nonetheless, a correction of over 25% remains a distinct possibility in the coming months [1].

The article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and investors are encouraged to conduct their own due diligence before making any decisions [1].

Source: [1] Is XRP ‘way overvalued’ to buy right now? (https://coinmarketcap.com/community/articles/689a1118f841533557a293dd/)