XRP, the native token of the Ripple payment system, has defied the broader crypto slump with an impressive 60% weekly gain, outperforming most cryptocurrencies. While Bitcoin and Ethereum remain stuck below their psychologically important price levels at $30,000 and $1,900, respectively, XRP has reclaimed its position as the fourth-largest digital asset by market value. Despite giving back some of its gains from last Thursday’s ruling, XRP has maintained a significant increase since then. This resilience could be attributed to potential buying pressure from crypto index funds that are considering adding XRP to their holdings.
According to David Lawant, head of research at institutional crypto exchange FalconX, the Ripple vs. SEC lawsuit did not result in a sustained rally across the crypto market. However, he suggests that the inclusion of XRP in digital asset funds’ portfolios could contribute to increased buying pressure and further boost its price. Index funds, in particular, have the potential to drive additional institutional flow into XRP. Lawant highlights that XRP’s market capitalization is over 3.5 times that of other major constituents like ADA and SOL, which typically have a weight of just over 1% in broad crypto indexes. If XRP is included in these underlying indexes, it could represent 4-5% of their composition.
While altcoins such as MATIC, SOL, and ADA experienced significant rallies following the XRP ruling, they have now retraced back to their pre-ruling levels or even lower. In contrast, XRP has sustained its upward momentum, demonstrating its resilience and market strength. Although the rush to purchase XRP may have subsided to some extent, the potential influx of institutional investors through index funds could provide ongoing support for the token’s price.
The overall performance of XRP amidst the broader crypto slump suggests that it continues to attract investor attention and maintain its position as a significant player in the digital asset market. As digital asset funds consider adding XRP to their portfolios, the token’s market value and influence may continue to rise, potentially impacting the composition of top broad crypto indexes. The coming weeks and months will reveal whether XRP can sustain its momentum and potentially break out from the current market trends.