In a recent report, on-chain data research provider Kaiko evaluated the liquidity ranking of several crypto assets, including major cryptocurrencies XRP, SOL, BTC and ETH. This is necessitated amid increasing odds of altcoin spot ETFs and as market depth returns to pre-FTX levels.
Kaiko’s asset liquidity ranking indicator was introduced after FTX’s collapse to address the limitations of using market cap alone to measure a token’s true value. FTX’s native token, FTT, which peaked at a market cap of nearly $10 billion, never had the liquidity to support that valuation, hence why the indicator exists.
Only a few large-cap tokens like $BTC, $ETH, $SOL, and $XRP have liquidity rankings that closely match their market cap.
Below we show the difference between market cap rank and liquidity rank. pic.twitter.com/FHA5FQZeSf
— Kaiko (@KaikoData) February 18, 2025
According to Kaiko, only a few large-cap tokens, XRP, BTC, ETH and SOL, have liquidity rankings that closely match their market cap. In its study, Kaiko identified outliers misleading investors who use market capitalization as a proxy for liquidity. This scenario occurs due to a limited number of actively traded pairs and a significant portion of supply locked, which reduces available liquidity.
Also, while Bitcoin continues to dominate trade volume, SOL and XRP are gaining pace. This trend suggests that the crypto market is becoming less concentrated, with potentially more liquidity flowing into altcoins. However, the trend is still emerging, with over half of the top 50 tokens struggling to draw more than $200 million in average daily volume.
XRP gains attention
Coinbase’s fourth-quarter earnings caught equity analysts offguard last week. For the first time in recent memory, XRP contributed more to Coinbase’s trading revenue than ETH. XRP’s 14% contribution during the quarter coincided with a jump in trading volumes as some asset managers prepared to provide spot XRP exchange-traded funds.
The rise in XRP volume has been seen on all U.S.-based exchanges since November, and it occurred just over a year after it was relisted on the majority of these platforms, following a landmark victory in the Ripple-SEC lawsuit.
Last week, the SEC acknowledged XRP ETF filings. This presents a potential volatility trigger in the future, as approval or denial might lead to a spike in trading. If the anticipation of its ETF approval plays out similarly to ETH, XRP may continue to boost trading-related revenues in the near term.
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