Could XRP Surpass Ethereum? 3 Key Signals Point to a Changing Crypto Landscape
As the cryptocurrency market evolves in 2025, one name is increasingly standing out: XRP. Once overshadowed by larger players, XRP is now gaining momentum and emerging as a serious contender to overtake Ethereum (ETH) in market capitalization. Recent data and market trends suggest that XRP may soon become the second-largest altcoin after Bitcoin — a development that could reshape investor strategies across the digital asset space.
Here are three major reasons why XRP's rise should not be underestimated:
XRP's Fully Diluted Valuation Overtakes Ethereum
According to CoinMarketCap, XRP’s Fully Diluted Valuation (FDV) has officially surpassed that of Ethereum. XRP's FDV currently sits at $210 billion, compared to Ethereum's $196 billion.
FDV is a key valuation metric in the crypto world. It measures the potential total market value of a cryptocurrency, factoring in all tokens that could enter circulation over time. In other words, it reflects what the asset would be worth if its maximum supply were fully issued and sold at current market prices.
For XRP to exceed ETH in FDV signals a broader shift in perceived long-term value. Analysts such as John Squire and Edoardo Farina interpret this as a sign that XRP is gaining institutional and retail trust at a faster rate. “The flip has already begun!” Farina claimed, referencing XRP's consistent outperformance over Ethereum for more than six months.
Capital Flows Are Shifting Toward XRP
Investment trends tell an equally compelling story. Data from TradingView reveals a significant change in market dominance between ETH and XRP in early 2025. Ethereum's dominance index (ETH.D) has plummeted from 14% to 7% since November 2024, while XRP's index (XRP.D) has surged from 1.2% to 4.5%.
This redistribution of capital underscores a growing preference among investors for XRP over ETH. It’s not just numbers on a chart, either. The XRP/ETH trading pair has broken a major technical downtrend that had persisted since 2016 — an important bullish signal that suggests momentum may continue favoring XRP.
Reinforcing this trend, a recent CoinShares report noted diverging fund flows: Ethereum-based products saw outflows of $26.7 million, while XRP-focused products attracted $37.7 million in inflows.
Sentiment Shifts in XRP’s Favor
Perhaps most crucially, market sentiment — a major driver of crypto valuations — is swinging toward XRP. According to BeInCrypto, XRP appears to be in a “pre-set” growth phase, supported by its expanding use case and growing institutional interest.
Ripple’s acquisition of Hidden Road for $1.25 billion, the launch of Asia’s first institutional XRP fund by HashKey, and Coinbase's introduction of CFTC-regulated XRP futures have all boosted confidence among investors.
Ethereum, meanwhile, has faced a wave of critical headlines. From declining dominance metrics to concerns over its centralized origins, ETH is struggling to inspire the same confidence it once commanded. Labels like “pre-mined” and “centralized” are dampening enthusiasm for Ethereum’s long-term outlook.