XRP Valuation Debate Heats up as Price Stalls Near $3.15

XRP Hovers Near Key Support

XRP is presently trading at $3.19, having recently tested short-term support levels. 

Market analyst BOSSMD notes that XRP is eyeing heightened bullish momentum to reclaim the $3.20 region.

Crypto analyst Lingrid also opined that holding $3.20 was critical because if buyers defended it, a run toward $3.70 would become realistic.

XRP’s $190B Valuation Soars 2,200x Above On-Chain Activity, Fueling Sustainability Debate

XRP's market capitalization has surged to approximately $190 billion, reflecting a remarkable 600% increase since November 2024. 

Despite this impressive growth, the XRP Ledger (XRPL) exhibits a stark contrast in on-chain activity, with a total value locked (TVL) of just $87.74 million. 

This disparity indicates that XRP's valuation is currently trading at over 2,200 times its TVL, raising questions about the sustainability of this valuation gap.

The surge in XRP's market cap can be attributed to several factors, including the resolution of the Ripple-SEC legal dispute, which has alleviated regulatory uncertainties, and the growing institutional interest in digital assets. 

Additionally, the introduction of tokenized real-world assets (RWAs) on the XRPL, such as the U.S. Treasury debt and stablecoins, has contributed to the increased valuation. 

As of August 2025, XRPL hosts over $175 million in tokenized assets, marking a 52% increase in just one month.

However, the XRPL's on-chain activity remains relatively modest. The network's decentralized exchange (DEX) volumes are approximately $49,621 in the last 24 hours, and its application fees total just $1,467. 

Moreover, the XRPL's EVM sidechain, designed to enhance decentralized finance (DeFi) capabilities, has experienced a sluggish start, with a TVL of only $100,818 and minimal trading activity. These figures suggest that while the XRPL is expanding its ecosystem, the actual utilization of its features is still limited.

The significant valuation disparity between XRP and its on-chain activity has led some analysts to question whether the current market cap is justified. Critics argue that the high valuation may be driven more by speculation than by fundamental usage metrics.

For instance, XRP's market cap is approximately 363,000 times its annualized fee revenue, highlighting a potential overvaluation compared to other blockchain platforms like Ethereum, which has a TVL-to-market cap ratio of around 5.6.

Conclusion

While XRP's recent price surge reflects growing optimism and institutional interest, the substantial gap between its market cap and on-chain activity warrants cautious consideration. 

Investors should monitor the XRPL's adoption and utilization rates closely to assess whether the current valuation is sustainable in the long term as the $3.15 to $3.20 being a key level to watch in the short term.