'Wall Street Pick' Ripple's paradox... Price soars but the chain remains 'empty'

Source: BlockMedia Original Title: ‘The Wall Street Pick’ Ripple’s Paradox… Price Rises but Chain Remains ‘Empty’ Original Link: https://www.blockmedia.co.kr/archives/1030721 Ripple has successfully attracted increased institutional investment this year by gaining attention from Wall Street and the UK financial sector, but on-chain liquidity and user numbers for XRPL(XRPL) are sharply declining. The structural disconnect of ‘rising prices but empty chains’ is deepening.

Since the approval of the US spot ETF(ETF), XRP(XRP) has become scarce in supply and is showing bullish momentum, but network transaction volume, fee income, and decentralized exchange(DEX) usage are continuously decreasing.

Institutional Capital Inflows

Ripple’s XRP has been gaining prominence as a ‘Wall Street coin’ with ongoing institutional capital inflows since 2026. The US’s first XRP spot ETF launched in November last year has recorded approximately $1.3 billion in net inflows so far. This has rapidly absorbed market liquidity, accelerating supply shortages.

According to CryptoQuant(CryptoQuant) data, Binance’s XRP holdings are at 2.6 billion units, the lowest since January 2024. It has significantly decreased from around 3.25 billion units at the end of last year. Similar withdrawal trends are also seen on Korean exchanges like Upbit.

Institutional participation remains active. Ripple recently expanded into the UK financial markets and launched a compliance support program with the Japan Asia Web3 Alliance. Ripple-backed Evernorth Holdings(Evernorth Holdings) is partnering with Doppler Finance(Doppler Finance) to build institutional liquidity infrastructure based on XRPL.

On-Chain Liquidity Plummets

Meanwhile, XRPL(XRPL) faces severe liquidity contraction. According to DeFiLlama(DeFiLlama), the total value locked (TVL) on XRPL is about $72.76 million, significantly lower than competing networks. Daily fee income is around $1,000, indicating the network is not capturing substantial economic activity.

The daily trading volume on XRPL DEX is $86,000, a 53% decrease over a week. Active users also sharply declined from 27,900 in November last year to 16,700 in December.

Growing Reliance on Derivatives

Amidst shrinking spot trading, dependence on derivatives has increased. CoinGlass(CoinGlass) reports that XRP open interest has reached $4.5 billion. Daily futures trading volume exceeds $13 billion, more than four times the spot trading volume of $3 billion.

Experts point out, “While ETF and derivatives trading support XRP’s price, the utilization of the real network continues to decline,” and warn of a ‘dangerous disconnect’ where prices are detached from on-chain demand.

The Paradox of Stablecoins

Ripple’s issued stablecoin RLUSD has a market cap of $1.336 billion, but most of it is traded on the Ethereum network. The remaining on XRPL is only $460 million, less than one-third of the total. Industry analysts say, “High deposit requirements and security structures on XRPL make fund transfers difficult.”

Despite increasing corporate partnerships, key DeFi liquidity is moving to competing chains. Experts forecast that “the success or failure of XRP this year depends on how well the gap between institutional wrapping(ETF) products and the on-chain ecosystem can be narrowed.”