Why is XRP Lagging Behind While Bitcoin and Ethereum Are Rising? Analysts List the Key Reasons!

$XRP, one of the most established altcoins in the market, is lagging behind Bitcoin and Ethereum in price performance for several reasons, according to recent analyses.

According to market analyst Omkar Godbole, $XRP has lagged behind major digital assets like Bitcoin and Ethereum due to its increasing circulating supply and relatively weak investment demand.

The analyst notes that $XRP is currently trading at $1.33, approximately 62.5% below its January 2018 peak of $3.55, and that its circulating supply has increased by 63%.

According to the analyst, $XRP is trading approximately 62.5% below its peak of $3.55 recorded in January 2018, while Bitcoin has risen by 314%, $ETH by 66%, and BNB, which has a similar market capitalization to $XRP, has increased by approximately 2800% during the same period.

Circulating Supply Increased by 63%!

One of the main reasons cited for $XRP’s weak price performance is the increase in its circulating supply.

Speaking to Coindesk, Nicolai Sondergaard, senior research analyst at analytics firm Nansen, noted that $XRP’s circulating supply increased from 38.7 billion in 2017 to 63.1 billion. According to the analyst, despite this approximately 63% increase, $XRP’s total market capitalization only decreased by about 3%, which is a key factor explaining the pressure on the price per token.

Tesseract Group Marketing Director Oliver Carding pointed out that growth in circulating supply can reduce the value a token represents, even if the total market capitalization remains similar. He added that the situation with $XRP is similar.

ETF Inflows Lag Behind Bitcoin and Ethereum!

According to analysts, $XRP continues to face challenges on the demand side as well. Paul Howard, senior director at market maker Wincent, stated that interest in $XRP mutual funds remains limited compared to BTC and $ETH funds.

According to SoSoValue data, $XRP funds received approximately $1.8 billion in inflows, remaining far below the levels seen in Bitcoin and Ethereum ETFs during the same period.

Paul Howard, a senior director at Wincent, also noted that Ripple’s business strategy is putting pressure on $XRP. According to the analyst, Ripple is focusing on cross-border money transfers and payment infrastructure rather than areas that attract more investor interest, such as DeFi and artificial intelligence. This is cited as one of the factors limiting $XRP’s investor narrative.

Nansen analyst also noted that $XRP spot trading volume decreased by 53.5%, perpetual futures volume by 44%, and the number of active addresses by 10.7%.