XRP, ranked as the fourth-largest cryptocurrency based on market capitalization, has garnered increased attention from both institutional and individual investors in 2025. The latest XRP Markets Report released by Ripple delves into the performance of the altcoin, revealing key insights.

The report highlights a noticeable contrast between the surge in spot trading volumes and a significant decline in on-chain activity on the XRP Ledger (XRPL).

The report indicates a sharp rise in spot trading volume for XRP during Q1 2025, maintaining an average daily volume of $3.2 billion across major exchanges. Noteworthy spikes in trading volume were observed towards the end of January and early February, peaking at over $16 billion before tapering off in March. Notable exchanges in this activity were Binance, leading with approximately 40% of the total volume, followed by Upbit (15%) and Coinbase (12%).

The proportion of USD and USD stablecoin volume traded via fiat pairs saw an increase from 25% in Q4 2024 to 29% in Q1, indicating a growing demand for fiat trading. XRP's price surged to $3.40, marking its highest point since January 2018, surpassing the performance of Bitcoin and Ethereum during the same period. Additionally, XRP-based investment products attracted substantial inflows, nearing $214 million year-to-date and nearly rivaling the global Ethereum funds.

Nevertheless, one analyst noted a significant drop in daily trading volume by over 86% in the past half-year, mentioning that the decrease could be attributed to the exit of retail traders.

Despite the decline in intraday volume, the overall market landscape in 2025 has been favorable for XRP, aided by positive regulatory developments. Notable institutional indicators include Franklin Templeton's application for an XRP ETF, the launch of XRP futures by CME, and Volatility Shares seeking approval for three XRP ETFs. Furthermore, the withdrawal of the SEC's appeal in a long-standing lawsuit reflects a positive regulatory shift.

Conversely, the report highlighted a sharp decline in on-chain activity on XRPL. Transactions on XRPL dropped by 37.06%, wallet creations decreased by 40.28%, and the amount of XRP burned as transaction fees also saw a decline by 30.89%. Decentralized exchange (DEX) volume witnessed a 16.94% decrease. Notwithstanding, the total value locked (TVL) on XRPL remained relatively constant at approximately $80 million, with monthly DEX volume hovering around $3.3 million.

The report suggested that Ripple's acquisition of Hidden Road, one of the significant M&A deals in the crypto space, could potentially enhance XRPL's on-chain activity, thereby painting a nuanced picture of XRP's performance in Q1 2025.