Ripple’s cryptocurrency XRP has experienced an extraordinary surge, reaching nearly $2.37 from its early 2021 price of $0.22. This represents a staggering 300% increase over the past month and a significant 1000% rise since early 2021. With this move, XRP has become the fourth-largest cryptocurrency by market capitalization, behind Bitcoin, Ethereum, and Tether.
The surge in XRP is largely attributed to the changing sentiment towards digital currencies following Donald Trump’s election as US President. In one of his rallies, Trump stated that he would make the US “crypto capital” of the world, sparking renewed interest in cryptocurrencies. This trend has also led Bitcoin to cross the $100,000 mark for the first time ever.
Ripple’s growth is not solely driven by the Trump factor. The company has been building its digital payment network using XRP, which facilitates fast and low-cost international money transfers. However, the SEC’s ruling on XRP’s status as a security has had a significant impact on the cryptocurrency’s price.
In 2023, a court ruled that XRP is not a security when sold to the public on an exchange but is considered a security if sold to institutional investors. This mixed ruling led the SEC to seek a $2 billion fine against Ripple. However, the court imposed a $125 million penalty instead. Recently, a group of state attorneys general and the DeFi Education Fund sued the SEC, alleging unconstitutional overreach.
The changing leadership at the SEC may also be beneficial for XRP. The current chair, Gary Gensler, is stepping down on January 20, 2025, and a more crypto-friendly candidate, Paul Atkins, may take his place. This could lead to a drop in the case against Ripple, which would positively impact XRP’s price.
Ripple is set to launch its RLUSD stablecoin, which will be fully backed by cash equivalents. The launch of this stablecoin is expected to drive growth for XRP and solidify its position as a leading cryptocurrency.
Despite the recent surge, XRP has not consistently outperformed other asset classes. In 2022, it underperformed the S&P 500 by 59%. However, the Trefis High Quality Portfolio has consistently outperformed the benchmark index over the same period, providing better returns with less risk.
Source: https://www.forbes.com/sites/greatspeculations/2024/12/06/up-300-in-a-month-xrp-is-just-getting-warmed-up