According to CNBC financial reporters, Ripple’s token, XRP, surged more than 20% in a week, beating BNB and cementing its position as the third-largest crypto by market cap, Cryptopolitan reported.
MacKenzie stressed that XRP’s rise is not a spontaneous phenomenon. The asset has been quietly performing well for months, even remaining stable when the crypto market has experienced a severe downturn.
XRP’s primary function is in cross-border payments, where Ripple designed the token as a bridge asset that facilitates the flow of value between currencies.
This differentiates XRP from Bitcoin’s narrative as a ‘digital gold’ and stablecoin.
MacKenzie believes XRP serves as an exchange layer that facilitates the transfer of value between currencies. Three main factors have been identified as driving inflows into XRP.
First, regulatory uncertainty has ended after Ripple settled its dispute with the US Securities and Exchange Commission (SEC) on August 2.
Second, the XRP market is seen as less crowded than Bitcoin and Ethereum.
Third, fund flows into XRP remained stable despite the fourth quarter decline, in contrast to the significant outflows that occurred in Bitcoin ETFs as prices declined.
Commenting on the decline in Bitcoin and Ethereum and concerns about the risk of forced selling by digital asset treasury companies, MacKenzie attributed the pressure to the structural weaknesses of the assets.
This situation has prompted investors to turn to crypto alternatives such as XRP to reduce risk.
MacKenzie also highlighted an important decision by MSCI that is expected to be announced in nine days, involving whether certain strategies will remain in their indices. The decision has the potential to trigger significant selling pressure from funds tied to index rules.
From a valuation perspective, XRP’s upside potential is seen as higher given that it started from a low price level. XRP accumulation activity has also increased significantly following the net outflows from Bitcoin spot ETFs in the fourth quarter of last year.
This development reflects a significant shift in the focus of crypto investors. XRP is now seen not as just an alternative, but rather as a major asset with the potential to play a greater role in the digital asset ecosystem, as Bitcoin and Ethereum continue to face regulatory challenges and market saturation.
