XRP Surges to Six-Year High Amid Anticipation of Crypto-Friendly Policies
XRP, the native token of the XRP Ledger network closely related to Ripple, has surged to a six-year high as bitcoin (BTC) rallied to $100,000. The token briefly topped $3 during the early U.S. trading session for the first time since early 2018, before paring gains.
Recent Performance
Recently changing hands at $2.95, XRP has been one of the best-performing tokens, with a 488% gain since Donald Trump’s election victory. It has now become the largest cryptocurrency by market capitalization behind BTC and Ethereum’s ether (ETH), reclaiming its third ranking from Tether’s USDT stablecoin. At $170 billion of market value, the token is now larger than the market capitalization of asset management giant BlackRock (BLK).
Fuel for the Rally
The gain was fueled by anticipation of crypto-friendly policies and an overhaul of digital asset regulation in the U.S. The Securities and Exchange Commission (SEC) and Ripple have been in a legal battle for years over XRP token sales.
Partnerships and Stablecoins
“This surge is driven by a growing number of partnerships, the launch of Ripple’s stablecoin RLUSD, and speculation about a potential spot XRP ETF,” said Diego Cardenas, OTC trader and at digital asset platform Abra. Ripple President Monica Long said in an interview last week that she expects a spot ETF to be approved “very soon” as approvals with the incoming administration will accelerate.
Breakout and Potential for New Highs
XRP also broke out of the consolidation pattern started in early December that CoinDesk markets analyst Omkar Godbole noted last week, paving the way for the next leg in the token’s rally. Another 15% rise from current prices would mean fresh all-time highs above the 2018 January top of $3.4. Still, adjusting for inflation over the years, XRP has to surpass $4.24 for a new high, according to Galaxy head of research Alex Thorn.
Investor Accumulation
Large investors’ accumulating XRP tokens over the past two months could also fuel the rally towards new records. Analytics firm Santiment noted that addresses holding between 1 million and 10 million tokens increased their holdings by 1.4 billion coins – worth roughly $3.8 billion – since November 12, continuing the accumulation while prices consolidated following early December highs.
Conclusion
The surge in XRP’s value is a testament to the growing interest in cryptocurrencies and digital assets. With anticipation of crypto-friendly policies and an overhaul of digital asset regulation in the U.S., it is likely that the token’s value will continue to rise in the coming months. As always, investors should be cautious and do their due diligence before investing in any digital asset.
FAQs
Q: What is driving the surge in XRP’s value?
A: The surge is driven by anticipation of crypto-friendly policies, partnerships, the launch of Ripple’s stablecoin RLUSD, and speculation about a potential spot XRP ETF.
Q: What is a spot ETF, and how might it impact XRP’s value?
A: A spot ETF is a type of exchange-traded fund that tracks the price of a specific digital asset, such as XRP. If a spot XRP ETF is approved, it could increase demand for XRP, leading to a rise in its value.
Q: What are the implications of XRP becoming the largest cryptocurrency by market capitalization?
A: XRP becoming the largest cryptocurrency by market capitalization could lead to increased attention and investment in the token, which could drive up its value. However, it could also create competition for other digital assets.
Q: Are there any potential risks associated with investing in XRP?
A: As with any digital asset, there are potential risks associated with investing in XRP, including market volatility and regulatory risks. Investors should be cautious and do their due diligence before investing in any digital asset.
