XRP's Undervalued Liquidity Narrative Amid ETF Surge

The cryptocurrency market in 2025 is witnessing a seismic shift as institutional adoption accelerates, driven by regulatory clarity and the impending approval of spot XRP ETFs. Amid this backdrop, XRP's liquidity profile-often overshadowed by its market capitalization-presents a compelling case for undervaluation. This article examines how XRP's liquidity metrics, combined with the structural tailwinds of ETF inflows, position it as a prime candidate for revaluation in a market increasingly defined by liquidity-driven asset pricing.

XRP's Liquidity: Strong Foundations, Underappreciated Potential

According to Coingecko's 2025 liquidity report, XRP's liquidity metrics in September 2025 reveal a robust trading environment. The XRP/USDT pair on Binance recorded a 30-day average daily trading volume of $1.73 billion, with order book depths showing buy orders up to 4.2 million XRP (47%) and sell orders up to 7.5 million XRP (58%). These figures underscore XRP's ability to absorb large trades without significant slippage, a critical trait for institutional investors. Its ultra-low transaction fees ($0.0002) and adoption by over 300 financial institutions via RippleNet further reinforce its utility as a settlement asset, a point the Coingecko report also highlights.

However, XRP's liquidity is not without limitations. While it controls 67% of market share on Bitget, Binance, and Coinbase within a ±$0.02 depth range, its cumulative liquidity at the ±2% level lags behind Solana (SOL), which holds 60% of Ethereum's liquidity in the same range. This disparity highlights a key challenge: XRP's liquidity, though strong, is less resilient to macro shocks compared to newer, faster-growing assets like SOL.

Liquidity-Driven Revaluation: XRP vs. BTC and Altcoins

Bitcoin's liquidity remains the gold standard, with Binance maintaining $8 million in order book depth on both buy and sell sides within a ±$100 range, per the Coingecko analysis. Ethereum, meanwhile, sees Bitget surpassing Binance in tight depth ranges (±$15), though Binance retains dominance at wider levels. XRP's liquidity, by contrast, tapers off more quickly, reacting sharply to news cycles or technical indicators, as discussed in Altcoin ETFs After Solana. This volatility suggests XRP's liquidity is less "sticky" than BTC's, but its concentrated presence on major exchanges (Binance, Coinbase, Bitget) offers a unique advantage: rapid capital absorption during ETF-driven inflows.

Dogecoin (DOGE) provides an interesting counterpoint. While its liquidity is tightly clustered around market price, XRP's broader order book depth allows it to handle larger trades more efficiently, according to the Coingecko data. This dynamic positions XRP as a hybrid asset-balancing utility (via RippleNet) with tradability (via deep order books)-that could benefit disproportionately from ETF-driven demand.

The ETF Catalyst: Liquidity Tightening and Price Rebalancing

The anticipated approval of XRP ETFs by October 2025 represents a structural inflection point. Analysts project inflows of $5–$15 billion in the first year, driven by institutional buyers purchasing XRP directly for custody, according to an NFT Evening analysis. This would tighten liquidity on exchanges, reducing sell-side pressure and elevating price. Historical precedents with Bitcoin and Ethereum ETFs suggest that such inflows could trigger multi-week price surges, with XRP's lower circulating supply amplifying the effect, a dynamic explored in an Analytics Insight piece.

Derivatives data already hints at this potential: open interest and implied volatility have spiked as traders anticipate the SEC's decision window, as noted in the NFT Evening analysis. If XRP ETFs follow the Bitcoin model, they could stabilize price volatility while attracting pension funds and 401(k) investors, further embedding XRP into traditional finance, a trend CoinEdition has highlighted.

• NFT Evening analysis: https://nftevening.com/xrp-etfs/
• Coingecko report (referenced earlier): https://www.coingecko.com/research/publications/crypto-liquidity-report-2025

Risks and Structural Constraints

Despite the bullish narrative, risks persist. Regulatory delays-such as those caused by the U.S. government shutdown-could disrupt timelines, a scenario flagged by Analytics Insight. Additionally, if ETFs rely on derivatives rather than spot purchases, the liquidity impact may be muted, per Coingecko's findings. A "buy the rumor, sell the news" scenario is also possible if inflows underwhelm expectations.

Conclusion: Liquidity as the New Valuation Metric

XRP's liquidity profile-strong but underappreciated-aligns with the broader trend of liquidity-driven revaluation in digital assets. As ETFs redefine how capital flows into crypto, XRP's unique combination of utility, low fees, and concentrated liquidity on major exchanges positions it to outperform peers. The coming months will test whether the market recognizes this narrative, but one thing is clear: in a world where liquidity is king, XRP's throne is far from empty.