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Ripple’s XRP: The Cryptocurrency Poised to Challenge Ethereum
XRP Soars 480%—Will It Surpass Ethereum’s Market Cap?
The Future of XRP: Could It Soon Outpace Ethereum in Value?
Ripple’s XRP: The Rising Star Set to Overtake Ethereum
XRP (CRYPTO: XRP), the native token of the Ripple blockchain, has experienced an impressive 480% increase over the past three months. This astonishing rally has boosted XRP’s market cap to approximately $180 billion, making it the third most valuable cryptocurrency in the world, just behind Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).
Dom Kwok, a former Goldman Sachs analyst, recently suggested that XRP’s value could soon surpass Ethereum’s. For that to happen, XRP’s price would need to rise by at least another 120%. Let’s look at XRP’s past performance and potential catalysts to determine if such a rise is possible.
What Sets Ripple Apart from Other Cryptocurrencies?
Ripple’s blockchain is used for routing real-time payments, remittance transfers, and currency exchange transactions. Ripple promotes its blockchain-based system as a more cost-effective, faster, and secure alternative to the widely used SWIFT protocol for money transfers. Several smaller financial institutions—such as Travelex Bank, Tranglo, and Sentbe—already use Ripple’s XCurrent network for their transactions.
When Ripple launched XRP in 2013, it hoped that its customers would adopt the token for their financial transactions. However, most of its customers initially avoided using XRP and instead used the XCurrent network to process fiat currency payments.
XRP’s earliest trading price was just $0.0058893 per token, but it eventually reached a record high of $3.84 in January 2018. Like many lesser-known cryptocurrencies, XRP benefited from the growing market interest in Bitcoin.
However, two significant challenges caused its price to drop below $0.20 in 2020. First, the U.S. Securities and Exchange Commission (SEC) sued Ripple in 2020, claiming that the initial sales of XRP tokens were illegal as unregistered securities. This lawsuit led to major trading platforms delisting XRP, and Ripple lost many of its partners, including Grayscale, which shut down its XRP Trust.
Second, XRP’s value proposition was questioned due to its lack of scarcity and utility compared to other leading cryptocurrencies. Ripple mined its entire supply of 100 billion XRP tokens before launch, and it locked more than half of them in escrow accounts on its blockchain. The company periodically releases these tokens to regulate XRP’s liquidity.
Unlike Bitcoin and other proof-of-work (PoW) coins, XRP cannot be actively mined. It also doesn’t support staking rewards like proof-of-stake (PoS) tokens such as those of Ethereum. Additionally, Ripple’s blockchain doesn’t allow the development of decentralized apps (dApps) or the creation of smaller tokens and crypto assets, making XRP appear more like a meme coin than a serious long-term competitor to Bitcoin and Ethereum.
Why Is XRP’s Price Skyrocketing?
XRP’s most significant obstacle—the SEC lawsuit—was somewhat resolved last August with a lighter-than-expected fine. However, the SEC appealed that ruling earlier this month, which prevented XRP’s price from rebounding as expected.
Despite this, most major crypto trading platforms relisted XRP after the ruling. Grayscale also re-launched its XRP Trust as a new closed-end fund (CEF) for accredited investors, and several firms have registered to sponsor their own XRP spot ETFs.
The strongest catalyst for XRP came in November with Donald Trump’s victory in the U.S. presidential election. Trump has expressed plans to loosen the government’s regulatory grip on the crypto market, and his recent appointment of crypto-friendly Mark Uyeda as the acting SEC chair strongly suggests that the SEC may cease its case against Ripple.
In December, the New York Department of Financial Services approved Ripple’s planned launch of a new stablecoin pegged to the U.S. dollar. This approval could encourage more financial institutions to adopt Ripple’s blockchain, providing more stability to XRP’s price.
To address its lack of a developer ecosystem, Ripple plans to integrate Ethereum-compatible smart contracts into a new sidechain linked to the XRP ledger. This move could make XRP more appealing to Ethereum-based developers.
Ripple has also been promoting itself as a platform for tokenizing real-world assets (RWAs) like real estate, artwork, and other tangible objects. Unlike non-fungible tokens (NFTs), which represent digital assets, tokenized RWAs represent ownership of physical objects. Tokenized RWAs could also be used to divide ownership of an asset among multiple token holders. As more assets are tokenized, more people could use XRP to acquire them.
Will XRP’s Price Rise Another 120%?
Kwok believes that the relaxed U.S. regulatory environment, combined with Ripple’s push to tokenize real-world assets, will drive XRP to surpass Ethereum in the near future. However, achieving that growth will depend on a variety of factors, including market conditions, adoption rates, and further regulatory developments.
Ripple’s Week in Focus: Is XRP Ready to Break Barriers and Hit a New All-Time High?
