XRP Rally Spurs Record Profit-Taking as Ripple Labs Plans Bitwise XRP ETF Investment

Long-term holders of XRP made an impressive $1.5 billion in profits last week as the popular cryptocurrency hit a three-year high. This marked the highest profit realization since April 2021. It’s common for investors to take profits after a big rally, but this doesn’t necessarily mean a change in how people feel about the token in the long run.

According to data from an FXStreet report that cites Santiment data, the Market Value to Realized Value (MVRV) ratio shot up to 217% on Tuesday. This indicates that the current market value of XRP is much higher than the average price at which it was bought. This could suggest a potential overvaluation in the short term, which might slow down a rapid rise in prices.

The MVRV is a ratio that compares the total value of all circulating coins to their value based on the last time they were moved on the blockchain. This ratio gives us an idea of the total cost basis of all coins currently in circulation. If high profit-taking continues along with the overvaluation indicated by the MVRV, it could lead to a market correction.

Despite these factors, XRP has seen a significant increase in price recently, hitting a high of $1.60 before dropping to $1.30. Overall, the token is up by 31% in the past week and has more than doubled in just two weeks. This surge can be attributed to a few positive developments, including regulatory clarity for Ripple Labs, the launch of money market funds on XRP Ledger, and a bullish technical analysis of the price.

In another move that has caught the attention of investors, Ripple has announced plans to invest in the Bitwise Physical XRP ETP. This investment led to XRP prices increasing by 10%. The European XRP ETP will now be traded under the ticker GXRP on Germany’s Deutsche Börse XETRA, as per the announcement. Brad Garlinghouse, CEO of Ripple Labs, mentioned in the release that there is a growing global demand for exposure to the crypto asset class, which has been driven by an increasing interest in crypto-backed investment opportunities.

The Bitwise Physical XRP ETP, launched in 2022, allows European investors to get exposure to XRP through a 100% physically backed ETP. This move comes at a time when the U.S. regulatory environment for crypto is becoming clearer, which could further boost demand for crypto ETPs like the Bitwise Physical XRP ETP.