While much of the crypto market has started the year in cautious recovery mode, XRP has taken a very different path. Since January 1, the token has surged roughly 25%, climbing to around $2.24 and leaving other major cryptocurrencies trailing behind.
By comparison, Bitcoin has gained about 6% to trade near $91,900, while Ether is up roughly 10% to around $3,210. The widening performance gap suggests XRP’s rally is not simply riding a broad market upswing, but is being powered by catalysts unique to the token itself.
ETF Inflows Put XRP in a Class of Its Own
One of the clearest drivers behind XRP’s outperformance has been the behavior of spot XRP exchange-traded funds. Unlike Bitcoin and Ether ETFs, which tend to see inflows and outflows move in step with price, XRP ETFs have followed a different pattern.
During the softer market conditions of late 2025, investors steadily accumulated XRP ETF exposure. CNBC reporter Mackenzie Sigalos highlighted this divergence, noting that while Bitcoin and Ether ETFs often experience synchronized flows with price moves, XRP ETFs attracted buyers even during market doldrums.
That dynamic made XRP a less crowded trade. Investors positioning early were able to capture a sharper rebound once momentum returned.
The numbers reinforce that narrative. Data from Coinglass shows that spot XRP ETFs have attracted nearly $100 million in inflows since the start of the year, bringing total cumulative inflows to approximately $1.15 billion. Notably, these products have yet to record a single day of outflows, and Monday marked the largest one-day inflow in more than five weeks — a sign that institutional demand remains persistent rather than fleeting.
Sentiment and On-Chain Data Tell the Same Story
Beyond ETFs, both sentiment indicators and on-chain metrics are aligning with the bullish price action.
According to AI-driven analytics firm Market Prophit, crowd sentiment toward XRP is firmly positive. More importantly, what the firm categorizes as “smart money sentiment” is also leaning bullish, suggesting confidence among more experienced or institutional participants.
On-chain data adds another layer of confirmation. XRP exchange reserves on Binance have dropped to their lowest level in two years, according to CryptoQuant. Falling exchange balances are often interpreted as reduced near-term selling pressure, as fewer tokens are immediately available to be sold.
At the same time, network usage is picking up. Data from XRPscan shows transaction counts have increased by more than 50% over the past two weeks, pointing to growing activity on the XRP Ledger rather than purely speculative trading.
Ripple’s Expanding Footprint in Japan
Corporate developments at Ripple Labs are also supporting the narrative that XRP’s strength is rooted in more than price momentum alone.
Ripple has reportedly entered into partnerships with major Japanese financial institutions, including Mizuho Bank, SMBC Nikko, and Securitize Japan. These collaborations are aimed at expanding adoption of the XRP Ledger across Japan’s financial sector, one of the world’s most influential markets for fintech innovation.
Regulatory progress in the U.S. is adding further credibility. In December, Ripple received conditional approval from the Office of the Comptroller of the Currency to establish Ripple National Trust Bank. While still subject to final conditions, the move could significantly strengthen Ripple’s regulatory standing.
Ripple President Monica Long has also pointed to strong internal momentum. Speaking to Bloomberg, she described the company’s November fundraising round and $40 billion valuation as “very positive and favorable,” while noting that an initial public offering is not currently on the agenda.
Reasons for Caution Despite the Momentum
Despite XRP’s impressive start to the year, analysts caution that several of its current tailwinds can reverse quickly.
ETF-driven rallies fueled by narrative momentum have historically cooled when sentiment shifts. Social-media enthusiasm, while powerful, can fade just as fast as it emerges. Even declining exchange balances can rise sharply during periods of heightened volatility as holders rush to take profits.
External factors also loom large. Regulatory developments, macroeconomic shocks, and broader shifts in crypto market risk appetite remain variables that could weigh on XRP, regardless of its recent strength.
Why XRP Is Leading — for Now
XRP’s early-2026 leadership reflects a rare alignment of forces: steady ETF inflows when other majors struggled, bullish sentiment across retail and institutional segments, tightening exchange supply, rising network activity, and renewed regional expansion by Ripple.
Whether XRP can maintain that lead will depend on how durable those inflows prove to be and whether broader market participation eventually catches up to its strong start. For now, though, XRP has clearly set the pace — and the rest of the market is watching closely.