XRP Overtakes USDT as 3rd Largest Crypto by Market Cap: What You Need to Know

XRP Overtakes USDT as 3rd Largest Crypto by Market Cap: What You Need to Know

XRP, the cryptocurrency developed by Ripple, has recently achieved a major milestone, overtaking Tether (USDT) and becoming the third-largest cryptocurrency by market capitalization. 

Let’s dive into the key developments and implications surrounding this achievement.

Understanding Ripple and XRP

Founded in 2012, Ripple is a blockchain-based company specializing in real-time gross settlement systems, currency exchange, and remittance networks. XRP, the platform’s native cryptocurrency, plays a central role in facilitating these transactions, making cross-border payments faster and more affordable.

XRP’s Market Performance

Recent Surge

  • Price Growth: XRP has seen a remarkable price increase of approximately 400% since the U.S. elections, with its value reaching around $2.74.
  • Market Capitalization: This surge has boosted XRP’s market cap to nearly $156 billion, surpassing Tether and securing its spot as the third-largest cryptocurrency, right after Bitcoin (1.90T market cap) and Ethereum (440B market cap).

Key Drivers

  • Regulatory Optimism: The election of Trump has fueled expectations of a more crypto-friendly regulatory environment. Speculation about changes in the leadership of the U.S. Securities and Exchange Commission (SEC), particularly the anticipated departure of Chair Gary Gensler, has bolstered investor confidence.
  • Legal Wins: A pivotal 2023 ruling by Judge Analisa Torres stated that XRP sales to retail investors do not classify as securities. While the SEC has appealed the ruling, it marked a significant victory for Ripple.

Future Prospects for XRP

ETFs and Institutional Interest:

Speculation is growing around the approval of XRP-focused exchange-traded funds (ETFs) in the U.S. Companies like Bitwise Asset Management have already filed for these ETFs, signaling rising institutional interest.

Launch of RLUSD Stablecoin:

Ripple is gearing up to release RLUSD, a new U.S. dollar-backed stablecoin, which is expected to compete with Tether (USDT) and USD Coin (USDC). Regulatory approval from the New York Department of Financial Services (NYDFS) is pending.

Impact of U.S. Leadership Changes on Ripple and XRP

The recent election of Trump is set to influence Ripple and XRP, particularly through anticipated changes at the SEC.

Key Changes on the Horizon

SEC Chair Resignation:

Gary Gensler, the current SEC Chair, has announced his resignation effective January 20, 2025. His tenure was marked by strict enforcement actions against cryptocurrencies, including a high-profile lawsuit against Ripple over the classification of XRP as a security.

Potential Successors:

Trump is expected to appoint a pro-crypto SEC Chair. Potential candidates include Paul Atkins, a former SEC Commissioner known for his crypto-friendly views, and Teresa Goody Guillén, a former SEC attorney experienced in blockchain matters.

Regulatory Outlook:

A leadership shift could lead to a more collaborative approach, potentially resulting in settlements or even the dismissal of certain enforcement actions against Ripple.

Broader Implications for the Crypto Industry

  • Policy Shifts: A more lenient regulatory framework could halt ongoing SEC cases and reduce barriers to innovation in the digital asset sector.
  • Market Dynamics: Greater regulatory clarity is likely to attract institutional investors, increasing market liquidity and stability while raising questions about investor protections.

RLUSD: Ripple’s Upcoming Stablecoin

Ripple is set to launch Ripple USD (RLUSD), a stablecoin pegged to the U.S. dollar, with significant implications for the cryptocurrency market.

Details and Features

  • Launch Timeline: RLUSD is slated for release on December 4, 2024, pending NYDFS approval.
  • Transparency: RLUSD will be fully backed by U.S. dollar reserves, short-term government treasuries, and other cash equivalents. Ripple will ensure transparency through third-party audits and monthly attestations.
  • Multi-Blockchain Integration: The stablecoin will be issued on both the XRP Ledger and Ethereum blockchain, leveraging the strengths of both ecosystems.

Strategic Partnerships

Ripple has partnered with several prominent exchanges and market makers to ensure widespread adoption of RLUSD:

  • Exchanges: Bitstamp, Bitso, Bullish, CoinMENA, Independent Reserve, MoonPay, and Uphold.
  • Market Makers: B2C2 and Keyrock.

Regulatory Compliance

To reinforce compliance, Ripple has established an advisory board for RLUSD, including former FDIC Chair Sheila Bair, ensuring robust oversight and adherence to regulatory standards.

Conclusion

XRP’s ascension to the third-largest cryptocurrency spot highlights Ripple’s ongoing success in navigating the complexities of the crypto market. With favorable legal rulings, a supportive regulatory outlook, and ambitious initiatives like RLUSD, Ripple is well-positioned to continue driving innovation at the intersection of traditional finance and blockchain technology. However, the evolving regulatory landscape will remain a critical factor shaping its trajectory.

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