XRP is showing signs of a powerful resurgence in early 2025, gaining momentum as one of the top-performing digital assets so far this year. The asset’s daily spot trading volume has surged, reaching an average of $3.2 billion, with peak periods in January and February seeing explosive spikes above $16 billion. However, while these figures signal strong market enthusiasm, underlying network metrics reveal a contrasting trend — a decline in actual blockchain usage and on-chain activity.

XRP’s Stellar Price Surge in Q1 2025

Over the past year, XRP has posted an impressive 298.8% gain, with a notable 26.9% increase recorded in just the last 30 days. The asset saw a massive 44.89% rally between January 10 and 17, peaking at $3.40 on January 16 before settling around $2.14 at the time of writing — still up 2.5% on the day and earning it the tag of a top gainer.

This bullish price movement has been supported by both institutional and retail investors, with XRP-related investment products attracting $214 million in net inflows year-to-date. This growth marks a sharp turnaround in sentiment following a prolonged legal battle with the U.S. Securities and Exchange Commission (SEC), which had previously clouded XRP’s outlook.

Fiat and Stablecoins Gain Ground in XRP Trading

An emerging trend driving XRP’s current trading surge is the growing influence of fiat and stablecoin trading pairs. According to data highlighted by Ripple-focused analysts, trades involving fiat currencies and stablecoins rose from 25% to 29% of total XRP volume. This shift points to increased demand from traders seeking stability and regulatory clarity — especially in light of anticipated regulatory advancements in the U.S. and abroad.

On-Chain Activity Paints a Mixed Picture

Despite strong market-level activity, the XRP Ledger’s on-chain fundamentals are signaling a weakening trend. Key metrics such as daily XRP Ledger transactions have fallen by 37.06%, while new wallet creation has plunged over 40.28% in recent months. More notably, average daily blockchain transaction volume is down more than 86% compared to six months ago.

This decline suggests that while traders are heavily engaged in speculative markets, real-world usage of the XRP Ledger is struggling to keep pace. Analysts warn that this divergence could indicate short-term exhaustion or a market driven more by hype than by fundamental utility. If the trend continues, it may signal a growing disconnect between XRP’s price action and its underlying blockchain health.

Legal Clarity and ETF Speculation Fuel Optimism

Despite these network concerns, the long-term outlook for XRP remains optimistic, largely due to evolving regulatory dynamics. The SEC recently dropped its appeal against Ripple Labs, bringing an end to a years-long legal standoff and significantly boosting investor confidence.

Additionally, speculation is mounting that a U.S.-based XRP Spot Exchange-Traded Fund (ETF) could receive approval later this year. Such a move would mark a major milestone for institutional adoption, potentially unlocking billions in capital inflows and propelling XRP toward a new price trajectory.

What Lies Ahead for XRP?

For now, XRP bulls remain confident. With regulatory pressure easing and investment demand climbing, XRP appears poised to retain its upward momentum — provided it can resolve the disconnect between price movement and on-chain engagement.

Market watchers will be paying close attention to whether on-chain metrics begin to improve in Q2, signaling a more sustainable uptrend. If utility metrics recover in tandem with price, XRP could solidify its position not just as a speculative asset but as a fully operational blockchain platform powering cross-border finance.

As 2025 progresses, XRP’s journey will be shaped by how well it balances investor excitement with the need for real-world utility. Whether the current surge is a temporary spike or the start of a lasting bull run may depend on what happens next — not just in the markets, but on-chain.