Bitcoin towers over all other cryptocurrencies like a digital Everest, but history shows that the market often rewards assets that quietly gain traction while attention is focused elsewhere. That momentum may be happening right now for XRP (CRYPTO: XRP) despite being down 7% over the past six months.
Three new metrics show that XRP's momentum is accelerating much more than many investors realize. If this trend continues, it could even outperform Bitcoin by 2025 and perhaps even further down the line, so take some time to understand each metric.
1. The Growth of Wallets Is Exploding
The more cryptocurrency wallets that are active on the XRP chain, the more users will use it for its intended purpose. Wallets do not perfectly correlate with actual users, as people can have more than one wallet, but this is still a good proxy since every user needs at least one wallet to interact with the chain.
XRP is thriving on that front. In the first quarter of this year, the average daily active wallet addresses increased by 142% quarter-over-quarter to 134,600, marking the fastest growth streak in the past two years. In contrast, on June 15, Bitcoin had about 705,000 active wallets, down from 841,905 a year earlier. Thus, XRP's user base is almost certainly growing faster than Bitcoin's, reinforcing the idea that it could outperform.
More unique senders and receivers mean broader ownership, deeper liquidity, and a higher likelihood of new capital continuing to flow in rather than flowing out immediately. If the number of XRP users continues to grow rapidly while Bitcoin stagnates, the price of this smaller coin could rise even further and faster.
2. Users Are Getting Real Utility Here
The increasing number of wallets indicates some vitality is only half the story. The other half is that the payment volume and transactions being processed with XRP are also rising, indicating real capital is moving across the chain.
On June 10, there were 4.11 billion XRP in payment volume within 24 hours, up from 295.67 million the day before, marking a 1,300% surge. The network handled that increase without any technical difficulties, which is a significant achievement. It is questionable how many other payment-oriented chains could handle such large transaction volumes without experiencing slowdowns.
More importantly, this surge coincides with speculation on social media about regulators soon approving an XRP exchange-traded fund (ETF).
However, even major catalysts like ETF approval rarely drive traffic up 12 times on a chain unless a huge amount of real money is moving. And increasing payment volume signals growing commercial engagement, which is a favorable point for XRP.
It is not unreasonable to expect that the 4.11 billion figure will become the new norm. The hype around ETFs may fade, or users may restrict their large transfers. But maintaining even a portion of that payment volume on-chain recently would also create significant upward price pressure for XRP.
3. An Important Technological Upgrade Is Coming Soon
The ultimate catalyst for XRP is technology.
According to the development roadmap of the chain, a long-awaited Ethereum Virtual Machine (EVM) sidechain is expected to launch before the end of Q2. This will allow developers to deploy the same smart contract code that supports Ethereum's decentralized finance (DeFi) ecosystem without sacrificing XRP's rapid settlement times.
In English, that means that lending protocols, automated market makers (AMM), and yield strategies can run on the sidechain while settling value back to the main ledger. Another significant impact is that developers who typically work on Ethereum applications -- the largest segment of single developers in the cryptocurrency space -- will now also be empowered to build applications that operate on XRP's ledger using the programming languages they are already proficient in. Thus, XRP's ecosystem is likely to experience a boom of new projects and applications aimed at addressing all sorts of different DeFi niches.
Assuming the sidechain ships on schedule and initial DeFi projects gain traction, XRP could layer programmable finance on top of its cross-border payment segment. That growth story would then provide a much wider array of potential revenue streams and network effects than before. Notably, Bitcoin will not undergo any such technological upgrades, nor will its growth story change much, making this another factor driving XRP's faster growth.
Of course, the security of the sidechain, bridge risks, and maintaining developer interest are all factors that need to be addressed in the upcoming quarters. But if the performance of the ledger so far is any indication, the first two pieces of the puzzle will be resolved to satisfy both investors and developers, which increases the likelihood that talent will also stay.