According to data from Santiment, the rally is largely fueled by significant whale accumulation and growing market speculation about a potential XRP exchange-traded fund (ETF) in the United States.

Whale Activity Signals Strong Market Confidence

Santiment highlighted that wallets holding between 1 million and 10 million XRP tokens have been aggressively accumulating the asset since November 2024. Over the past two months, these wallets added approximately 1.43 billion XRP tokens, marking a substantial 37.4% increase in holdings.

XRP climbs to $2.69, delighting investors as the #3 crypto by market cap. Source: Santiment via X

“This cohort of whales is showing enormous confidence in XRP, and their continued buying is a major driver of the recent rally,” Santiment noted in a social media update.

Whales holding 1M–10M XRP boosted holdings by 37% in two months, fueling the surge. Source: Santiment via X

Sean Dawson, head of research at on-chain protocol Derive, echoed similar sentiments, stating that speculation about an XRP ETF listing this year could be a major catalyst for the bullish momentum. “As Bitcoin attracts investment, it’s natural for some capital to rotate into altcoins like XRP, which amplifies the bullish sentiment,” Dawson explained.

Legal Battle with the SEC Looms Large

XRP’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) remains a critical factor influencing market dynamics. According to Dawson, the forthcoming deadline for the SEC to appeal its case against Ripple Labs could keep driving XRP’s action.

“Given the new administration’s pro-crypto White House stance, the legal prospects for XRP may dramatically change,” Dawson said. A resolution of the case—which has already lifted hopes among investors of the XRP cryptocurrency—could set a precedent for wider regulatory clarity in the cryptocurrency market.

Institutional Interest and ETF Speculation

Anticipation of a possible XRP ETF has contributed to the market’s optimism. Dawson suggested that institutional investors might soon look toward altcoins like XRP for some diversification, with Bitcoin consolidating its gains.

A recent report by JPMorgan estimated that XRP exchange-traded products could amass between $4 billion and $8 billion in net assets in just their first six months of trading. Comparatively, XRP ETPs are expected to outperform spot Ether ETFs in adoption rates, signaling robust demand.

Tight 2024 Consolidation Preceded the Breakout

With a difference in price of just 3.8% from January to October, XRP’s 2024 price action had set up the recent breakout as one of tight consolidation. The period of low volatility has brought the importance of patience to light among XRP investors.

Ripple (XRP) price chart. Source:XRP Liquid Index (XRPLX) via Brave new Coin

According to David Gokhshtein, the founder of Gokhshtein Media, this is well-deserved for the XRP community: “XRP holders deserve this.”

Broader Market Outlook

While the surge of XRP is promising, the wider cryptocurrency market is very volatile. Continuous growth, analysts say, depends on several factors, such as regulatory clarity and macroeconomic conditions—even the result of the case involving Ripple against the SEC.

For now, XRP’s strong whale activity, coupled with growing institutional interest and ETF speculation, positions it as one of the top-performing assets in the crypto space heading into 2025.