XRP Overtakes Ethereum in FDV

Following its impressive run last November, XRP re-ignited optimism around its potential to surpass Ethereum in market capitalization.

Following its impressive run last November, optimism has been sparked around XRP's potential to overtake Ethereum in market capitalization.

This confidence is fueled by XRP's massive 257% gain against Ethereum since November 2024. To put this in perspective, if someone invested $1,000 in November 2024 to buy ETH at an average price of $1,534, their investment would be worth $6,064 today.

Alternatively, if someone invested $1,000 to buy XRP at an average price of $0.54 during this period, they would have around $2,868 in XRP today. This highlights the significant difference in both assets' performance.

However, despite this difference, XRP still needs to rise substantially to overtake its closest rival, although it previously flipped Tether (USDT) months back to become the third-largest crypto asset. Meanwhile, the recent downturn is already putting a reset on things, with XRP now relegated to fourth position.

Interestingly, despite the market collapse, crypto analyst Miles Deutscher recently pointed out that XRP has overtaken Ethereum, but only on the fully diluted valuation (FDV) metric.

For the uninitiated, an asset's fully diluted valuation accounts for its market cap when considering total supply. The metric differs from the actual market cap, which only considers the asset's circulating supply and is a true representation of its market worth.

Data from CoinMarketCap confirms Deutscher's claims. Specifically, Ethereum now has a fully diluted valuation of $228.9 billion at press time. This considers its total supply of 120.61 million tokens and the prevailing unit price of $1,899.66 per Ethereum.

In comparison, XRP boasts a fully diluted market cap of $231.18 billion, accounting for its total supply of 99.98 billion and the unit price of $2.31 per XRP. Notably, the $231.18 billion figure is $2.28 billion more than Ethereum's value.

In simpler terms, this indicates that if all the XRP tokens were in circulation, including the ones locked in Ripple's escrow accounts, the asset's market cap would have surpassed Ethereum's. It is noteworthy that, in contrast, all the Ethereum tokens are currently in circulation.

However, this is not the first time XRP has surpassed Ethereum in FDV, with this feat occurring occasionally over the past few weeks. This is largely due to XRP's increasing circulating supply, as more tokens leave the escrow accounts, as well as XRP's impressive gains against Ethereum within this period.

Nevertheless, it is important to highlight that XRP is not the only inflationary asset of the duo. For context, Ethereum is also currently inflationary due to the implementation of the Dencun upgrade, which leads to fewer transaction fees and a subsequent reduction in the amount of ETH burned.

While XRP's latest feat against Ethereum is not particularly noteworthy until it reflects in both assets' actual market caps, the asset is currently in a good position to overtake ETH. At the current position, XRP price would need to rise 69% to $3.9 to surpass Ethereum's market cap of $229.12 billion.