XRP is emerging as a strong contender to overtake Ethereum (ETH) in market capitalization. The 2025 market outlook reveals several factors that support the scenario where XRP becomes the second-largest altcoin by market cap.
Recent data highlights three main reasons why XRP has the potential to reach this milestone shortly: XRP’s Fully Diluted Valuation (FDV) has surpassed ETH’s, capital is shifting from ETH to XRP, and investor sentiment is increasingly positive toward XRP.
XRP’s Fully Diluted Valuation Has Surpassed ETH’s
According to the latest data from CoinMarketCap, XRP has officially surpassed Ethereum in terms of Fully Diluted Valuation (FDV). Specifically, XRP’s FDV is $210 billion, while ETH’s is $196 billion.
FDV is a key metric. It reflects the potential value of all tokens in the total supply, including those not yet in circulation. This suggests that XRP is valued higher than ETH when considering their maximum supply.
Investors like John Squire and Edoardo Farina see XRP’s lead in FDV as an early sign that its market cap might soon overtake ETH’s.
“This marks over 6 straight months of XRP outperforming Ethereum. The flip has already begun!” Edoardo Farina predicted.
Investor DONNIE also believes XRP’s higher FDV signals a shift in market perception. According to him, it reflects growing investor acceptance of XRP. This sentiment seems to favor the narratives and forecasts surrounding XRP over those of ETH.
Capital Is Shifting from ETH to XRP
Another key factor is the shift in investment capital between the two cryptocurrencies. TradingView data shows that ETH’s dominance (ETH.D) has dropped to a new low, while XRP’s dominance (XRP.D) rose sharply in 2025.

Dominance indexes reflect how capital is distributed across the market. Since November last year, ETH.D has fallen from 14% to 7%. Meanwhile, XRP.D has climbed from 1.2% to 4.5%. This contrast reveals that investors are prioritizing XRP over ETH.
This capital movement has also triggered a significant technical outcome. The XRP/ETH chart has broken a downtrend line that has held since 2016, signaling a long-term bullish trend for the pair.

The breakout represents more than just a technical signal. It reflects a broader shift in market sentiment. Investors are increasingly focusing their attention on XRP.
A recent report from CoinShares supports this. It states that digital asset investment products saw contrasting flows between ETH and XRP in the past week. While Ethereum recorded outflows of $26.7 million, XRP attracted a strong inflow of $37.7 million.
This capital shift demonstrates XRP’s growing potential to close the gap in market cap with ETH.
Investor Sentiment is More Positive Toward XRP
Finally, investor sentiment is leaning toward XRP. Recent reports highlight growing optimism around XRP, while ETH faces more skepticism.
According to a recent BeInCrypto report, XRP’s price appears to be in a “pre-set” growth stage. This is driven by support from financial institutions and the development potential of the XRP Ledger.
Recent news has fueled a positive atmosphere for XRP holders. Ripple acquired Hidden Road in a $1.25 billion deal. HashKey launched the first institutional XRP investment fund in Asia. Coinbase also introduced XRP futures regulated by the CFTC.
In contrast, ETH continues to face negative headlines and doubts. Reports such as “Ethereum Dominance hits 5-Year Low” and criticism of ETH as a “Centralized Pre-Mined Coin” have worsened public perception.
Market sentiment is a major driver of price movements. Rising support for XRP could propel it to surpass ETH in market capitalization.
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