Bitcoin (BTC 0.88%) towers over every other cryptocurrency like a digital Mount Everest, yet history shows that markets often reward assets that quietly gain traction while the spotlight points elsewhere. That dynamic may be playing out right now for XRP (XRP 0.13%) despite its decline of 7% during the last six months.

A trio of fresh metrics suggests XRP's engine is revving harder than many investors realize. If the trends hold, it might even outperform Bitcoin in 2025 and perhaps well beyond, so let's take a moment to understand each.

1. Wallet growth is exploding

The more active crypto wallets there are on XRP's chain, the more users there are that are using it for its intended purpose. Wallets don't perfectly correlate with actual users, as people can have more than one wallet, but it's still a good proxy measure as every user does need at least one wallet to interact with the chain.

XRP is flourishing on that front. In the first quarter of this year, the average daily active wallet addresses jumped by 142% quarter over quarter to 134,600, the fastest growth streak during the past two years. In contrast, on June 15, Bitcoin had about 705,000 active wallets, down from 841,905 wallets a year prior. So XRP's user base is almost certainly growing faster than Bitcoin's, which supports the idea that it might outperform.

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More unique senders and receivers mean broader ownership, deeper liquidity, and higher odds that new capital keeps flowing in rather than straight back out.

If XRP's user base keeps growing at a rapid pace while Bitcoin's plateaus, the smaller coin's price could soar higher -- and faster.

2. Users are getting real utility here

The rising number of wallets that exhibit some life is only half of the story. The other half is that the volume of payments and transfers processed using XRP is rising too, suggesting that real capital is moving across the chain.

On June 10, there were 4.11 billion XRPs in payment volume within 24 hours, up from 295.67 million the day before, making for a jaw-dropping 1,300% surge. The network handled that surge without any technical difficulties, which is a significant accomplishment. It's dubious that most other payment-oriented chains could handle such a bolus of traffic without encountering slowdowns.

More importantly, the spike coincided with speculation on social media of an imminent approval by regulators of an XRP exchange-traded fund (ETF). 

Nonetheless, even major catalysts like an ETF approval rarely drive a 12-fold jump in traffic on a chain unless large volumes of real money are moving. And rising payment volume signals growing commercial stickiness, which is another point in XRP's favor.

It isn't reasonable to expect that the 4.11 billion figure becomes the new norm. ETF hype could fade, or users might throttle back their big transfers. But sustaining even a portion of the recent volume of on-chain payments would put meaningful upward pressure on XRP's price.

3. A key tech upgrade is drawing nearer

XRP's final catalyst is technological.

A long-anticipated Ethereum Virtual Machine (EVM) sidechain is slated for launch before Q2 ends, according to the chain's development roadmap. This will let developers deploy the same smart contract code that powers Ethereum's decentralized finance (DeFi) ecosystem but without abandoning XRP's rapid settlement times.

In English, that means the chain's lending protocols, automated market makers (AMMs), and yield strategies can run on the sidechain while settling value back to the main ledger. Another important effect will be that developers who typically work on Ethereum applications -- which is to say the largest single segment of developers in the cryptocurrency sector -- will now also be empowered to develop apps that operate on XRP's ledger using a programming language that they're already fluent in. Thus, XRP's ecosystem could potentially experience an explosion of new projects and applications aiming to address all manner of different DeFi niches.

Assuming the sidechain ships on schedule and early DeFi projects gain traction, XRP could layer programmable finance on top of its cross-border payment niche. That growth story would then offer a much broader set of potential revenue streams and network effects than before. Notably, Bitcoin isn't about to experience any such tech upgrades, nor is its growth narrative going to change much, so this is another factor driving XRP to grow faster.

Of course, the sidechain's security, bridging risks, and the retention of developer interest are all elements that will need to pass muster during the coming quarters. But if the ledger's track record so far is any indication, those first two pieces of the puzzle will be taken care of to the satisfaction of investors and developers alike, which makes it more likely for talent to stick around too.