XRP Market Cap Once Surpassed SOL, What Happened?

[TL；DR]

In the recent collective upward trend in the crypto market, XRP has performed particularly well, surpassing SOL in market cap and becoming the third largest market cap project after BTC and ETH.

The expected resignation of the SEC chairman has eased Ripple’s long-standing judicial dispute, as the market begins to reprice the value of XRP in the context of its spot ETF application.

Although the current rise of XRP is accompanied by an increase in futures holdings, investors still need to monitor market volatility and risks, remain sensitive, and manage risks accordingly.

Introduction

According to market data, many traditional cryptocurrencies with high market caps have experienced a collective upward trend recently. The well-established payment project XRP has performed particularly well, surpassing SOL in market cap at one point. In this context, the article will focus on analyzing the context before and after the rise of XRP for the benefit of readers.

With a Monthly Increase of Nearly 5 Times, XRP is Revitalized

Despite Bitcoin‘s current high volatility, the Altcoin sector has finally begun to rebound, which confirms our forward-looking thinking on the market in our blog post “The Market Situation is Bullish: Will the Altcoin Season Come Again?“ As the most rapidly rebounding traditional payment token in recent times, Ripple (XRP) has attracted a lot of attention from the market.

The recent departure of the Chairman of the US SEC may ease expectations of the long-standing judicial dispute over Ripple (XRP). XRP has been heavily hyped in the market throughout November, and as of the writing date, XRP has risen fivefold from the previous month to the present, demonstrating strong market excitement and speculative enthusiasm.

Source: Gate.io

Specifically, if we exclude the market cap of stablecoins, the market cap of XRP has skyrocketed to an astonishing level of $139.68B, successfully surpassing SOL’s market cap of 109.37B and returning to become the third largest market cap project after BTC and ETH.

Meanwhile, XRP trading was exceptionally active on Gate.io, with a staggering 24-hour spot trading volume of $570M and perpetual futures holdings rising to $53M, ranking first among all cryptocurrencies.

Source: Gate.io

As a well-established payment project with insufficient innovation, I believe many friends will be puzzled by this project’s five-fold short-term increase. So, what market narrative logic is behind such active trading?

XRP Hype: High Consensus Community + Fundamental Driven + Emotional Hype

As the core token of XRP Ledger, a distributed network that supports cross-border payments, XRP has ushered in important market opportunities since November. The significant increase in its price is the result of market speculation and the joint efforts of high consensus communities, in conjunction with many favorable fundamentals.

From a market perspective, with Trump’s victory in the presidential election, the upcoming departure of SEC Chairman Gary Gensler will help ease the pessimistic expectations that Ripple (XRP) has been mired in judicial litigation for many years. Gensler is known for his tough crypto policies, and his departure suggests that the regulatory environment may shift towards moderation, leading the market to begin repricing the value of XRP at this turning point.

Source: sec.gov

Of course, the greater speculation expectation is that in the current increasingly relaxed regulatory environment, Bitwise, Canary Capital, Grayscale Investment, and 21Shares have successively applied for XRP spot ETFs, and the expectation of massive fund allocation of XRP undoubtedly increases its price potential and compliance status.

For example, on November 1, Grayscale announced that its XRP trust fund is open to qualified, certified investors, providing more investment opportunities for XRP. This news laid the foundation for the price increase of XRP, a similar situation that has also occurred on SUI, which we previously mentioned in our blog article.

Source: @Grayscale

The following month, the Ripple team conducted a series of carefully planned promotional activities during rising coin prices. From the CEO accepting media interviews, sponsoring university hackathons, and releasing quarterly reports to news of collaborations with traditional financial institutions, these activities continue to bring market attention and investor interest to XRP.

Especially after November 6, the XRP team began to officially place orders, emphasizing the huge opportunities for XRP in the future and further stimulating market enthusiasm.

Source: @bgarlinghouse

Of course, the improvement in XRP fundamentals and technology does not logically support such a massive-market cap token to rapidly climb fivefold. It is necessary to mention the enormous speculative role played by the fervent XRP community. In fact, for many years, the XRP community has been known for its high degree of mystification and loyalty, an extremely rare atmosphere in the crypto world. The loyalty and persistence of the community have not only brought many retail investors to XRP, but also further expanded its influence.

To Sum Up

It is not difficult to find that the surge of XRP is not simply emotional speculation, but the result of multiple factors such as legal progress, policy expectations, and market demand resonating.

Especially in the context of the approval of Bitcoin and Ethereum ETFs, the expected application of XRP spot ETFs has brought a wave of rapid price discovery. However, after the dispute between Ripple and SEC ended, the market’s confidence in the legitimacy and stability of XRP gradually strengthened, indicating the arrival of a more diverse and mature era of crypto investment.

Although XRP has faced many doubts and challenges in the past few years, including its CEO’s repeated public criticism of Bitcoin and controversies within the community, this “pull-is-justice” trend ultimately changed the market’s view.

Amidst a wave of positive news, whether XRP can continue to rise depends on the upcoming market dynamics and regulatory trends. It is worth noting that an increase in futures holdings accompanies the current rise of XRP, as the last similar event led to a 17% pullback in the coin price. In short, the changes in the crypto world are often beyond imagination, and investors should remain vigilant and manage risks accordingly. We will also continue to monitor the latest market trends in the near future.