The cryptocurrency market witnessed a significant milestone as XRP, the blockchain-based payment solution from Ripple Labs, surpassed the $3 mark for the first time in seven years. This surge was fueled by a combination of market optimism and strategic developments, including the anticipation of a more crypto-friendly stance from the Securities and Exchange Commission (SEC) under the incoming Donald Trump administration. XRP’s price spiked over 16% within the last 24 hours, reaching an intraday high of $3.39 and pushing its market cap to an impressive $193 billion, thereby outranking stablecoin Tether to claim the position of the third-most valued cryptocurrency globally.
This valuation now places XRP above well-established Wall Street software companies like Adobe Inc. (ADBE), Intuit (INTU), and MicroStrategy (MSTR) in terms of market cap, underscoring the growing acceptance and valuation of cryptocurrencies in traditional finance sectors. The trading volume of XRP also saw a dramatic increase of nearly 48% to $27.46 billion, making it one of the most traded digital assets, only behind Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
Several factors contributed to this bullish momentum for XRP. Key among them, as already mentioned, is the expected policy shift at the SEC, where a more accommodating regulatory environment is anticipated with the change in administration. This is particularly significant given Ripple Labs’ ongoing legal entanglement with the SEC over whether XRP should be classified as a security. The potential approval of XRP spot exchange-traded funds (ETFs) adds another layer of optimism, potentially opening new avenues for institutional investment into XRP. In fact, JPMorgan (JPM) has forecast that an XRP ETF could attract between $4 billion and $8 billion in net new assets if approved by the SEC. This influx of capital could significantly boost XRP’s prospects and market value. Moreover, Ripple’s launch of the RLUSD stablecoin further signals its commitment to expanding its footprint in the digital asset space.
However, the surge in XRP’s value came amidst a formal appeal by the SEC, filed late Wednesday, challenging the previous court ruling that XRP sales on public exchanges did not constitute securities transactions. The SEC’s argument hinges on the claim that Ripple’s promotional activities via social media and media outreach created an expectation of profit among both institutional and retail investors, thus classifying XRP as an investment contract under the Howey Test. This appeal disputes the notion that retail transactions, being anonymous and through exchanges, did not involve an expectation of profit based on Ripple’s efforts.
Ripple, on its part, staunchly defends XRP as a digital currency rather than a security, arguing that its sales do not meet the legal criteria for an investment contract. Stuart Alderoty, Ripple’s Chief Legal Officer, described the SEC’s appeal as a reiteration of previously unsuccessful arguments, expressing confidence that the appeal would lose momentum under new SEC leadership, especially after current Chair Gary Gensler’s exit in 2025.
Despite the legal challenges, XRP has demonstrated resilience and growth, reaching its highest price point since 2018. This development is a testament to investor confidence in the potential regulatory changes that could benefit XRP. The market’s reaction to these developments indicates not just a vote of confidence in Ripple’s legal strategy but also a broader optimism about the future regulatory environment for cryptocurrencies in the U.S. under a new administration.
Price Action: At the time of writing, XRP is trading at $3.35, reflecting a 14.47% intraday increase. Over the past month, the coin has gained 27.66%, which, while impressive, is still far below the nearly 483% surge it has experienced year-over-year. XRP reached its all-time high of $3.84 on January 3, 2018, exactly seven years ago.
WallStreetPit does not provide investment advice. All rights reserved.
Leave a Reply