Key Takeaways:
XRP, the native utility token of the Ripple blockchain, has been riding a massive bullish wave that has resulted in its price surging to an incredible 6-year high of $2.71 on December 2. The cryptocurrency began the year trading at just $0.61, reflecting a nearly 350% increase in its price since.
XRP Hits $2.71 Amid Optimism of Trump Presidency And Shifting U.S. Crypto Policies
Donald Trump’s landslide victory in the U.S. Presidential elections has infused the global crypto market with an overwhelmingly positive sentiment and XRP seems to be benefiting the most from it at the moment.
The token’s price has rallied over 90% in the past week and it is showing no signs of slowing down. Even more impressive than its weekly gains is the 443% increase in value since November.
This bullish momentum has led to Ripple dethroning Tether (USDT), Solana (SOL), and Binance Coin (BNB) to become the third-largest cryptocurrency by market capitalization, with its valuation currently at $154 billion. XRP’s rally over the past week has made it the second-best-performing crypto among the top 100 coins by market capitalization.
Ripple’s rally aligns with the election of Trump as the 47th president of the U.S. and the resignation of Gary Gensler, the current chairman of the Securities and Exchange Commission (SEC), whose tenure was marked by increased enforcement action against crypto firms, including the XRP-issuer.
Gensler’s departure marks the end of a regulatory era, led by the Biden administration’s anti-crypto stance, where many industry players, particularly Ripple, have been embroiled in long-standing legal battles with the regulator.
$85.5 Million In Futures Contracts Liquidated As Experts Anticipate XRP Price To Rally Further
According to data from CoinGlass, XRP has experienced liquidations worth $85.5 million in futures contracts in just 24 hours, even outpacing Bitcoin’s nearly $73 million. Interestingly, a vast majority, about $55 million worth, of these liquidations were bets predicting that the price of XRP would fall.
Futures liquidations occur when traders betting on a cryptocurrency’s price find it difficult to maintain their positions due to market shifts. The fact that a large portion of the liquidations were short positions indicates a strong bullish sentiment as XRP’s price rose dramatically, forcing these traders to exit the market at a loss.
Ki Young Ju, the founder of crypto analytics firm CryptoQuant, took to X to suggest that the Coinbase exchange played a major role in driving the XRP price rally. He noted that over the last 30 days, the price premium for XRP on the exchange ranged from 3% to 13%. He also stated that the South Korean exchange Upbit, which has more XRP holders than Binance, showed no significant premium so far.
This premium means that Ripple is trading at a higher price on Coinbase than on other crypto exchanges, signaling strong interest in the asset from U.S.-based institutional and retail investors.
NYDFS Set To Approve Ripple’s Dollar-Backed Stablecoin RLUSD
Meanwhile, Ripple’s long-awaited USD-pegged stablecoin, RLUSD, is close to being released with various reports suggesting that the New York Department of Financial Services (NYDFS) is set to approve it.
Fox Business reported that the company is preparing to release the stablecoin as early as December 4. If the launch goes ahead as planned, then it will mark a pivotal moment for Ripple by positioning RLUSD as a direct competitor to established stablecoins like Tether’s USDT and Circile’s USDC.
RLUSD would provide Ripple users with an alternative token that offers all the benefits of crypto assets without the price volatility associated with XRP.
There is also speculation that Ripple might use its XRP escrow holdings to establish the initial RLUSD reserves. Currently, the company holds billions of XRP tokens in escrow, which are periodically released to manage liquidity and fund operations.
There are several benefits to Ripple deciding to lock up a large portion of its XRP escrow to back RLUSD. Firstly, it would provide substantial collateral for the stablecoin, reinforcing trust in its value. Secondly, this would reduce the circulating supply of XRP, thus creating a scarcity that might drive its price up. Lastly, it would enhance the liquidity of the XRP Ledger, Ripple’s blockchain, further increasing its appeal to developers and investors.
Whales Increase XRP Holdings And Institutions Are Looking Forward To Ripple ETFs
The recent resurgence of XRP isn’t just tied to soaring prices or the highly anticipated launch of the RLUSD stablecoin. Another trend driving the market momentum is the large-scale accumulation of XRP tokens by whales and the potential release of exchange-traded funds (ETFs).
As per data sourced by Santiment, wallets holding between 1 million and 10 million XRP have amassed an additional 679.1 million tokens, worth $1.83 billion, in just three weeks, hinting that traders are betting on further growth in the token’s price or utility.
There has also been a record-breaking rise in XRP wallet activity. For the first time in the crypto’s history, the number of active wallets has surpassed 5.5 million. This indicates that adoption is growing as more users and institutions are participating in the XRP Ledger, whether for trading, making payments, or using the blockchain for decentralized applications.
Leading asset manager WisdomTree has applied with the SEC to launch an XRP-backed exchange-traded fund (ETF). The Wall Street firm joins a wave of similar applications from Bitwise, 21Shares, and Canary Funds, signaling a strong push to bring regulated Ripple-based financial products to the market.
At the time of writing, Ripple (XRP) is trading at $2.68 – up 17.05% in the last 24 hours.
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