The tokens issued by Ripple are trading at the highest price in six years, but what is behind this soaring price, and how far will it go?
XRP hit $2.48 on Monday, surging to become the world's third-most valuable cryptocurrency and a six-year high.
Although still short of 2018's all-time high of $3.40, Arthur Azizov, CEO of cryptocurrency exchange B2BinPay, told Forbes that the cryptocurrency issued by US blockchain company Ripple could break that record. He said there are many factors that suggest gender.
Trump's victory
Azizov said the main reason for this was Donald Trump's victory in the November 5 US presidential election.
The Republican candidate's victory sparked a return to bullish enthusiasm in the crypto market, with investors betting the president-elect will follow through on his pro-crypto pledges. The cryptocurrency market has surged 42% since the election to $3.5 trillion.
Ripple CEO Brad Garlinghouse said Trump “will make crypto great again.”
There's a reason Garlinghouse is so bullish. XRP has risen fivefold since November 5, outpacing the gains of major crypto rivals Bitcoin, Ethereum, and Solana.
frenetic trading
The rise in XRP prices also comes amid a trading frenzy that coincided with Robinhood relisting XRP on its platform last month.
Retail trading app XRP was delisted in 2020 after the U.S. Securities and Exchange Commission charged Ripple with violating securities laws by selling cryptocurrencies, putting it under regulatory scrutiny. In August, a US judge fined Ripple $125 million. Garlinghouse called the ruling a victory for the company.
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Ki Young Ju, CEO of crypto analysis platform CryptoQuant, said Coinbase whales are driving the rise in XRP.
Young Ju said the ferocious XRP trading activity on Coinbase has created a price premium for the cryptocurrency when compared to more retail-focused platforms such as Upbit.
Data from cryptocurrency analysis platform Scopescan shows that Korean retail investors are also contributing to the soaring price of XRP.
XRP trading on exchanges in the Asian country, including Upbit and Bithumb, outperformed Bitcoin in the past 24 hours.
Gary Gensler
The resignation of SEC Chairman Gary Gensler has also been cited as a reason for the soaring XRP price.
Gensler's tenure was marked by a hostile stance toward the cryptocurrency industry. And his departure from office on January 20, Trump's inauguration day, is seen by many as a positive sign for Ripple.
XRP's growth has been held back by a lengthy legal battle with Ripple. Azizov told Forbes that Gensler's departure could end that fight, which could allow for further growth for cryptocurrencies.
Altcoin rotation
Bitcoin soared by nearly $100,000 following President Trump's victory.
At the same time, Bitcoin's dominance, the ratio of Bitcoin's market size to the value of the entire cryptocurrency market, has fallen from 60% to 53% in the last week.
Historically, a decline in Bitcoin's dominance amid rising crypto market values typically signals the start of altcoin season as attention shifts to other cryptocurrencies such as XRP. research firm 10x Research said in a post last week.
XRP ETF
Following the success of Spot Bitcoin and Ethereum exchange-traded funds this year, Solana and XRP are vying to become the next cryptocurrencies to gain ETF approval.
Garlinghouse himself has said that he believes the introduction of an XRP ETF is “inevitable.”
Bitwise Asset Management, Canary Capital, 21Shares, and WisdomTree have already filed XRP spot ETF applications with the SEC.
André Dragosch, head of research at Bitwise Europe, said in a research note last week that the price could rise if the XRP ETF is approved.
Market analysts predict that the path to more crypto ETFs could become easier once President Trump takes office next year.
This is especially true if President Trump chooses a crypto advocate to head the SEC.
Osato Abang Nomayo is a DeFi correspondent based in Nigeria. He covers DeFi and technology. To share a tip or information about a story, contact osato@dlnews.com.
