Kaiko’s Liquidity Ranking of Crypto Assets

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 evaluation is particularly relevant 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 the collapse of FTX 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 the need for this indicator.

> 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.
> — Kaiko (@KaikoData) February 18, 2025

According to Kaiko, only a few large-cap tokens, namely XRP, BTC, ETH, and SOL, have liquidity rankings that closely coincide with their market cap. The study identified misleading outliers for investors who use market capitalization as a liquidity proxy. This discrepancy arises due to a limited number of actively traded pairs and locked supply portions, which significantly reduce available liquidity.

While Bitcoin continues to dominate trade volume, SOL and XRP are gaining traction. This trend indicates that the crypto market is becoming less concentrated, allowing potentially more liquidity to flow into altcoins. However, the trend is still developing, 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 off guard 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 increased trading volumes as some asset managers prepared for spot XRP exchange-traded funds (ETFs).

The rise in XRP volume has been noticeable across all U.S.-based exchanges since November, just over a year after it was relisted on most platforms following a landmark victory in the Ripple-SEC lawsuit.

The SEC recently acknowledged XRP ETF filings, presenting a potential volatility trigger in the future, as approval or denial may lead to spikes in trading. If the anticipation of its ETF approval mirrors that of ETH, XRP may continue to boost trading-related revenues in the short term.